A ustralia has decided on a new US $65 million (A $92 million) aid package to Cambodia in what it says is recognition that economic and social development is the best way to fight the Khmer Rouge insurgency.

Under a Memorandum of Understanding signed between the two countries on November 28, the money will be spent on improving education, agriculture, health and infrastructure over four years.

"The strongest weapon against the Khmer Rouge is economic and social development in Cambodia," Australian Ambassador Anthony Kevin said after signing the MoU with Finance Minister Keat Chhon.

"This agreement signifies that Australians will continue to work actively in these areas in Cambodia and with the Cambodian people."

Asked whether the aid agreement was a vote of confidence in the Cambodian government, the ambassador said: "Definitely".

"There is a sense in which we do not want to see stability in Cambodia deteriorating. We want to consolidate the progress already made and help Cambodia rejoin Southeast Asia as a normal country."

Keat Chhon - who will attend high-level aid talks between the two governments in Canberra in February - said the hoped the MoU, after long consultation, was the start of a new era of fruitful cooperation.

He also sought Canberra's urgent assistance to counter the food shortages Cambodia faced because of natural disasters this year.

The Australian Embassy, meanwhile, had updated its consular travel advice, saying that due to security concerns Australian travellers should excerise due care in Phnom Penh.

Outside the capital, non-essential travel should be avoided, and visits to Angkor Wat should only be made by air or in organised groups.

All Australian reisdents and travellers were "strongly urged" to register their intentions with the embassy in Phnom Penh.