Under the deal, announced at the Pacific Islands Forum on Friday, residents from Tuvalu facing displacement from climate change will be able to resettle in Australia.
Australia will take in 280 people each year, with the Pacific nation having a population of about 11,000 people.
As part of the elevated bilateral partnership between the countries, Australia will have a veto over Tuvalu's security arrangements with other countries.
Mr Marles said the agreement would be received well by other countries, despite China having ambitions in the region.
"The Pacific is a place of greater geo-strategic contest, there's no doubt about that, and we seek to be the natural partner of choice for countries in the Pacific," he told Sky News on Sunday.
"We were engaging with countries in the region, and we spoke with other countries in the region about what we were doing."
China has signed security pacts with other Pacific nations including the Solomon Islands, as part of a growing push for influence.
The deputy prime minister said Australia had a responsibility to ensure the Pacific did not become the least developed part of the world.
"This is a step which I hope will be welcomed within the Pacific, because it does represent a very significant step up in Australia's already significant engagement in the Pacific," he said.
"It makes very clear our demonstration of wanting to work with the Pacific very closely around questions of development."
Opposition defence spokesman Andrew Hastie said he welcomed any agreement which deepened ties with the Pacific.
"There is a geopolitical contest ongoing in the Indo-Pacific region, the great game is on," he told Sky News.
"We really need to work harder to build our relationships with those Pacific Island countries."
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