"We have a key agreement to exchange information and have full security cooperation," Prime Minister Haider al-Abadi told a news conference after talks with his visiting Turkish counterpart, Ahmet Davutoglu.
"The Turkish prime minister also wants us to have military cooperation in the face of terrorism and Daesh and we welcome that," said al-Abadi, using the Arabic acronym for the Islamic State group.
Davutoglu confirmed the two sides' agreement on closer security cooperation.
"There is a new page in relations between Turkey and Iraq and that is why I hope that there will be close cooperation between our security and intelligence agencies to defeat terrorism."
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The Turkish prime minister also rejected charges that his country facilitated the transit of militants through its territory to Syria.
"Turkey receives 35 million tourists a year and we cannot stop people from entering unless we have a case against them," he said in reply to a question.
About a third of Iraq, which shares a porous border with Turkey, is held by the Islamic State group.
Earlier this year, the group declared a caliphate on the large swaths of territory under its control in both Iraq and Syria.
Relations recently soured between Turkey and Iraq over what Baghdad sees as illegal oil exports through Turkey by its Kurdish self-ruled northern region.
Al-Abadi said today the two countries have reached an agreement on the issue but did not elaborate.