Anthony Albanese and Chris Hipkins want easier travel across the Tasman, setting up a working group to get closer to a "seamless" Australia-New Zealand border.
Mr Albanese flew into Wellington on Wednesday for annual talks between the leaders.
He said passport-free travel was not on the agenda but other changes could bring the two countries closer.
"What we are looking at is making a seamless experience of going through from country to country," Mr Albanese said.
"That might look at for example, how smart gates can operate and be complementary to our systems so that before you get on a plane in either country it's already recognised that you're OK to come in."
Mr Hipkins said the working group would report back by June.
“This process will bring the experts together to talk about whether there are ways in which we reduce barriers at the border, while not compromising our security," he said.
The Tourism and Transport Forum Australia welcomed the announcement as a "fantastic first step".
"We hope this group can help revolutionise travel across the Tasman ... we hope to see a trial or pilot program potentially in place by the end of next year," chief executive Margy Osmond said.
On his first official visit to New Zealand, Mr Albanese received a traditional Maori welcome and sat in the parliamentary chamber for Question Time before formal bilateral talks.
The discussions took in a wide range of topics, including regional security, climate change, trade and people-to-people links.
The meeting comes at a high point for trans-Tasman relations, with Australia moving to ease two long-standing bugbears of NZ leaders.
Under Mr Albanese's government, rates of deportations from Australia to NZ have eased.
Kiwi leaders have blamed deported criminals for a growing gang culture and elevated crime rates in NZ for years.
Mr Albanese's government has also removed virtually all barriers to citizenship for New Zealanders living in Australia, and in Wellington, trumpeted those changes had seen more than 10,000 applicants.
As of July 1, New Zealanders can apply for passports after four years of residency in Australia, allowing them to access benefits such as study loans, and work for federal agencies and the defence force.
Mr Albanese said Australia and NZ "can do so much more" together in defence and security.
That is unlikely to extend to membership of the AUKUS pillar two arrangement on sharing military technologies as Mr Albanese said there were "no plans" to expand.
"That doesn't mean there won't be co-operations across a range of areas," he said, referencing greater military interoperability on emergency responses.
The year is a banner one for trans-Tasman relations, recognising 40 years of the Closer Economic Relations free trade deal, 50 years of trans-Tasman travel arrangements and 80 years of formal diplomatic representation.
Australia is NZ's largest foreign investor and the prime ministers also issued a 10-year roadmap on economic engagement.
Mr Albanese's trip also coincides with the co-hosted Women's World Cup.
After formalities, the two leaders headed to the Wellington waterfront to take in the FIFA Fan Festival.
Mr Albanese, a craft beer advocate, drank a Steinlager with Mr Hipkins and showed off Matildas and Football Ferns shirts.
Their day concluded with a gala dinner at Government House with about 100 guests, including prominent business, cultural and political leaders.
Mr Albanese laughed at a joke that Australians usually visit to do business, lose at rugby, or inspect their Queenstown holiday homes.
"It must be the first one," MC David Downs said.
