Senator Hill also signed an agreement for joint training bases in Australia which should be operational by 2007.
"That will mean us enhancing a number of our ranges, in particular the Shoalwater Bay training area in Queensland, the Delamare Air range in the Northern Territory and also the new Bradshaw range in the Northern Territory," he said.
He says simulation technology has allowed multiple Australian bases to be included in the agreement.
"We haven't got to that detail but of course if you can simultaneously use a number of different bases within the one exercise, you can clearly exercise many more troops than we've been able to do in the past," he said.
Senator Hill says the United States is interested in establishing training opportunities in Australia and he can not understand concerns that it is a precursor to a full-scale US base.
"No, I don't understand that because there's no benefit to the United States in having permanent bases in Australia," he said.
Three military training facilities, including Shoalwater Bay near Rockhampton, will be upgraded under the deal.
Minister Assisting the Defence Minister Mal Brough says it will be the world's best joint training facility.
"I make it very clear that this is not about having a permanent large scale defence force from the US on Australian territory," he said.
"It is a joint training facility of which Australia will be a major beneficiary as well.
"There's been no suggestion at all that either pre-deployment equipment for other operations be left here."
Federal Member for Lingiari Warren Snowdon says Delamere is already being used for international troop training excercises and Bradshaw will be a world-class facility when it is completed.
But he says the Federal Government has skimped on details of the agreement, stoking fears of a permanent US military presence in Northern Australia.
"I don't think even this Government is that stupid," he said.
"But what I think it does highlight is the lack of detail about the agreement that has been reached with United States and the failure of the Commonwealth to consult widely and appropriately.
"I understand that the Northern Territory Government is not aware of the details of the agreement and of course Bradshaw and Delamere are both in the Northern Territory."
The national coordinator of the Anti-Bases Campaign says the decision is bad news for everybody.
Dennis Doherty says Australia should not hitch itself so tightly to the US.
"This creates enemies and we are creating regional enemies," he said.
"You know at Bali when the bombers got up in the morning when they did the bombing they said, 'now we are starting a war against the United States, today we start war against the United States' and 88 Australians died, and that's the sort of thing that's going to happen more and more often."
