Japanese surface to ship missiles will be fired from the Beecroft Weapons Range at Jervis Bay early on Friday, July 21.
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The test firing on the type 12 missiles is taking place as the Australian Defence Force hosts the Japanese Ground Self-Defense Force as part of Exercise Talisman Sabre 2023.
While it will be a live fire event, the missiles will not be carrying explosive ordnance.
This will be the first time the truck-mounted missiles have been tested in Australia.
Chief of staff for Japan's Ground Self-Defense Force, General Morishita Yasunori, said the surface to ship missile firing exercise would "enhance a high level of trust between Australia and Japan".
He said Exercise Talisman Sabre "strengthens cooperation with Australia and the US, which will help maintain and strengthen a free and open Indo-Pacific".
Talisman Sabre exercise director Brigadier Damian Hill said the missile testing was evidence of strengthening links between Australia and Japan.
"This is the first time the JSDF have tested this capability in Australia and is an example of how our partnership continues to grow and deepen," Brigadier Hill said.
The type 12 surface-to-ship missile was developed by Japan's Mitsubishi Heavy Industries in 2012, with a range of about 200 kilometres.
However Japan has been working to introduce an upgraded ship-launched variant of the missiles by 2026, which are planned to have an extended range of between 200 and 1000km.
The operation at Beecroft will coincide with the Exercise Talisman Sabre 2023 launch in Sydney.
More than 30,000 military personnel from 13 nations are taking part in the 10th iteration of the military exercise, running from July 22 to August 3.
Talisman Sabre is the largest Australia-US bilaterally planned, multilaterally conducted exercise and a key opportunity to work with like-minded partners from across the region and around the world every two years.
Fiji, France, Indonesia, Japan, Republic of Korea, New Zealand, Papua New Guinea, Tonga, the United Kingdom, Canada and Germany are all participating in Talisman Sabre 2023 with the Philippines, Singapore and Thailand attending as observers.