The first maritime boundary agreement between Australia and Indonesia was signed on 18 May 1971 and delimited only a small portion of their overlapping maritime entitlements. In 1972, this initial continental shelf boundary was extended to the west, but there was still a vast amount of maritime space left to be delimited. Several provisional arrangements were made in the following years before their maritime boundary was fully established through a bilateral agreement that was reached on 14 March 1997.

The delimitation between Australia and Indonesia is unique in that it divides overlapping maritime claims into two different sets of boundaries, the northern seabed boundary (continental shelf), and the southern fisheries boundary (exclusive economic zone). This creates an area of overlapping sovereign rights, provisions for which were made in Article 7 of the 1997 Agreement. The eastern Australia–Indonesia maritime boundaries divide approximately 700 nautical miles of maritime space, and to the west of the Timor Gap, another approximately 960 nautical miles of overlapping maritime claims are divided.