The companies already cooperate on supply and production and the new agreement will build on that, they said.
"Winchester is one of the world's leading small arms businesses, with an unrivalled pedigree in small arms ammunition stretching back to its founding in the U.S. almost 150 years ago," said Thales Australia Chief Executive Officer Chris Jenkins.
"We firmly believe that our two companies have much to offer our customers by working together."
Added Clive Pugh, Winchester Australia's director and general manager: "The opportunity to assist Thales develop defense and commercial markets is a very exciting step for us. There is a strong complementary fit between our operations and we are looking forward to the challenges that lie ahead."
In addition to exploring marketing opportunities the agreement will enable Thales to develop more cost-effective solutions for products it supplies to the Department of Defense under existing contracts.
The Thales group's munitions operations in Europe include Thales Advanced Weapon Systems, Thales Missile Electronics, a stake in fuses specialist Junghans Microtec, TDA Armements and Forges de Zeebrugge.
Winchester Australia has supplied ammunition to defense and law enforcement in Australia since 1967.