SYDNEY - Singapore is swopping 500,000 doses of the Pfizer vaccine with Australia, which is grappling with a surge in Covid-19 cases in its two most populous states.

The deal, announced by the two nations on Tuesday (Aug 31), involves Australia receiving 500,000 doses of the vaccine this week and then delivering a similar number to Singapore in December.

Singapore's Prime Minister, Mr Lee Hsien Loong, said the deal reflected the "warm and long-standing friendship" between the two countries.

"Glad to support their efforts to get Australians vaccinated as soon as possible," he said on Facebook. "Countries must be united in the battle to quell the pandemic, so that we can all move into the new normal. Singapore is ready to do our bit."

Mr Lee said the 500,000 doses will have more potential use for Singapore as booster shots in December.

Australia's Prime Minister, Mr Scott Morrison, thanked Mr Lee and the Singapore Government, describing the incoming delivery as "500,000 more doses of hope".

He said the deal would enable Australia to accelerate its vaccine roll-out and extend the scheme to youths aged 12 to 15 from mid-September.

"We need to vaccinate the whole country and we need for those doses to go from one end of the country to the other and for them to be taken up," he said.

The Pfizer-BioNTech doses come at a crucial time for Australia, which has a relatively low vaccination rate but is now grappling with a worsening outbreak of the highly transmissible Delta strain of the coronavirus.

Currently, the nation's two most populous cities, Sydney and Melbourne, are in lockdown. The state of New South Wales is the worst affected, recording 1,164 local cases on Tuesday, down from 1,290 cases on Monday, a national record.

Australia was initially slow to roll out vaccines and has struggled to secure adequate supplies. Just 35 per cent of Australia's residents aged 16 and over are fully vaccinated. In contrast, Singapore has fully vaccinated 80 per cent of its population, one of the world's highest vaccination rates.

Singapore's Ministry of Foreign Affairs said on Tuesday that the 500,000-dose deal will help both countries to achieve their vaccine schedules.

"Australia will provide the same quantity of vaccines back to Singapore at a later date, after we have drawn down on our existing supplies vaccinating the rest of our population, including new incoming long-term pass holders as we open up our society and economy," it said in a statement.

"These returned doses would come in more useful for Singapore then, potentially as booster doses for specific segments of our population that could benefit from such boosting."

Singapore's Minister of Foreign Affairs, Mr Vivian Balakrishnan, said on Twitter: "We stand with our Australian friends to vaccinate our people and combat Covid-19 together."

Australia is urgently trying to increase its vaccination rate as part of a plan to end lockdowns and reboot the economy once the vaccination rate reaches 80 per cent. Two weeks ago, the country bought one million Pfizer doses from Poland, including an initial delivery of 530,000 doses to target areas of Sydney where cases are surging.

Australia was one of the world's most successful countries in suppressing Covid-19 last year, but much of it is now facing an outbreak that may be impossible to eradicate.

Canberra, the national capital, went into lockdown three weeks ago after recording its first locally acquired case in more than a year. The Australian Capital Territory, which includes Canberra, extended its lockdown on Tuesday until Sept 17 after recording 13 new cases.

The country's second most populous state after New South Wales, Victoria, which includes Melbourne, plans to reveal on Wednesday its plans to ease restrictions. It recorded 76 new cases on Tuesday and reported the deaths of two women, the first from Covid-19 this year in the state.

Australia's Foreign Minister, Ms Marise Payne, said the swop with Singapore was an example of "constructive and flexible" international cooperation to combat Covid-19.

Singapore and Australia expressed gratitude to Pfizer and BioNTech for helping to facilitate it.