Key details about Australia's relationship with Papua New Guinea after the Pacific nation hired mercenaries to take on armed rebels two decades ago will stay secret instead of being released.

The Sandline Affair, which brought down the government of Sir Julius Chan, was a defining moment in PNG's history and its relationship with Australia.

The personal bodyguard of the sacked head of PNG's armed forces threatens another soldier during unrest in 1997. Credit:Andrew Meares

The National Archives of Australia usually releases previously secret cabinet documents two decades after they were created in what the institution's director, David Fricker, said was the "essential function we perform for transparency and integrity of Australian government in this democracy of ours".

"This is what the archives does: in this present conversation we're having around Australia about secrecy, and about openness of information, about transparency and integrity of government, this is the function of the National Archives," Mr Fricker, a former ASIO boss, said at an event to mark the unsealing of cabinet papers from 1998-99.