The defence department will work on tightening its secrecy clauses after reports that Western pilots have been approached by China to train its military.
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Defence Minister Richard Marles asked his department to review its policies to stop former soldiers and personnel sharing classified information with foreign powers.
Mr Marles says the review has recommended "tightening up policies within defence", although he hasn't revealed further details of its findings.
He also refused to confirm if any personnel had been approached by agents of Beijing after reports a South African intermediary had worked to poach Australian, British and New Zealand pilots to provide military training.
"This is obviously a concerning set of circumstances and we need to make sure we have the most robust policies in place," he told Sydney radio station 2GB on Wednesday.
"One of the recommendations is that we develop some additional legislation, which the government will now pursue."
Mr Marles said there should be no doubts among former defence personnel about their obligations when it came to keeping the nation's secrets.
"Everyone who's part of the Australian Defence Force right now knows what's expected of them," he said.
"This is really to make sure that there is absolutely no doubt whatsoever that not just the secrets that people might come into contact with, but everything that surrounds it, forms part of that."
Defence department deputy secretary Celia Perkins said the review also made recommendations about defence training and employment policies, expanding outreach to former members and support channels.
Ms Perkins told senators the department was working towards engaging with former members in a "two-way flow" to remind them of their security obligations.
But she said the review didn't look at tracking former security clearance holders.
"I don't believe it's appropriate under Australian systems of government to track people after they leave their employment," she said.
"People are free to live their lives once they've handed back their obligations.
"Our focus will be on ... where people have had access to some of our most sacred and sensitive knowledge or training, we reinforce those obligations they carry through life, and we build some stronger linkages."
Ms Perkins said the minister had accepted all the recommendations and the department was working with the attorney-general to develop legislation.
The laws would cover what information could not be shared as well as the Commonwealth's ability to respond to any breaches.
"We're now working through a very active implementation plan that we'll deliver throughout 2023," Ms Perkins said.
The former coalition government was warned of the possibility of adversaries approaching Australian military personnel in June 2021, when now Opposition Leader Peter Dutton was defence minister.
Ms Perkins said she couldn't publicly reveal specific responses but agreed the response was proportionate.
Opposition defence spokesman and former SAS soldier Andrew Hastie welcomed stronger legislation to safeguard national security.
"Our national military secrets - including tactics, techniques and procedures - are not for sale," he said.
"Former ADF personnel who have served in classified and sensitive capabilities should be prohibited from working for a foreign power."
Australian Associated Press
