SYDNEY (AFP) - Australia plans to resettle asylum-seekers in developing countries as part of a radical overhaul of its border protection policy to help stem the flood of boatpeople arriving on its shores, reports said on Friday.

Papua New Guinea is at the heart of the revamp, News Limited newspapers and the Australian Broadcasting Corporation said, with the Pacific nation's Prime Minister Peter O'Neill expected to jet into Australia on Friday for an announcement.

Under a deal Australian Prime Minister Kevin Rudd is said to have thrashed out, asylum-seekers would not only be processed in other countries, such as poverty-stricken Papua New Guinea, but also permanently resettled there.

The aim is to pose a strong disincentive for people considering the dangerous boat journey from Indonesia, particularly so-called economic migrants who make the trip not to flee persecution but for a better life in Australia.

Australia has struggled to stem an influx of asylum-seekers arriving by boat, with record numbers turning up in 2012 and more than 13,000 so far in 2013.

Hundreds have drowned making the journey and Canberra's plans to send them to remote Pacific islands for processing has so far failed to stop the flood.

Foreign Minister Bob Carr has said asylum-seekers are increasingly "economic migrants", many from Iran and Sri Lanka.

The ABC reported on Friday that Indonesia had agreed to a request by Prime Minister Rudd to tighten visa restrictions for visitors from Iran, who currently enjoy visa-free entry to the sprawling Southeast Asian nation with many then taking a boat illegally to Australia.

It follows Mr Rudd's recent meeting with Indonesian President Susilo Bambang Yudhoyono in Jakarta, where they announced an agreement to promote greater regional co-operation on cross-border immigration.

Australia's Deputy Prime Minister Anthony Albanese said further details would be forthcoming.

"We're in discussions, announcements will be made when they're made. I'm not in a position to make further detail here," he said, but welcomed the Indonesian move on Iranians.

"What it will do is stop the transit traffic to go from Iran, Middle East, Indonesia, get your visa on arrival and then have already pre-organised a people smuggler to put you on the boat," he said.

"That will be far more difficult if there's not an automatic transit through Indonesia. It's an example of good co-operation and I congratulate and thank the Indonesian government for doing what they've done."