The Memorandum of Sale was signed Friday in Perth.
"During my visit to Jakarta in April this year, I confirmed that the Australian government was willing to sell five C-130H aircraft, along with a simulator and spare parts, to Indonesia at a discounted rate," Smith said in a news announcement. "This offer was in addition to the four C-130H aircraft that Australia is currently in the process of transferring to Indonesia following discussions between our respective leaders in November 2011.
"The sale of a further five C-130H transport aircraft will further enhance Indonesia's capacity to respond to natural disasters and humanitarian crisis."
The monetary value of the C-130H sale, the delivery schedule for the aircraft and other details of the memorandum of sale were not disclosed.