Francois Hollande on Tuesday became the first French president to make a state visit to Australia, pushing to strengthen ties almost two decades after nuclear tests in the South Pacific sparked fierce criticism of Paris.

The president, welcomed with a 21-gun salute in parklands on Sydney harbour, said his visit was also designed to underline France's presence in the Pacific and its intention to remain there.

Hollande, who is leading a major business delegation, is trying to strengthen historical links and economic relations with Australia, which has enjoyed decades of growth.

"We are in a position where we can have closer and further economic ties," Hollande told the Australian Business Council.

"What I am saying is we need to push our aspirations further," he added, describing French companies such as satellite giant Arianespace as at the "forefront of technology".

Relations suffered during nuclear testing in Polynesia in the 1990s and the sinking by French agents of the Greenpeace ship Rainbow Warrior in Auckland in 1985 as it prepared to lead protests around Mururoa Atoll.

However Australia and France signed a strategic partnership in January 2012 and have worked closely on Afghanistan, Syria, Iran and other major crises in recent years.

"We have a trump card to play in this country which is in its 24th year of uninterrupted growth and has launched major projects in sectors such as telecommunications, new technologies, infrastructure and transport," said one French official.

Hollande's delegation includes heads of the country's leading companies such as Vinci construction, the national rail firm SNCF, defence specialists Thales and Safran, energy giants GDF Suez, and global luxury house LVMH.

Two-way trade in goods and services was worth US$6.9 billion (5.4 billion euros) in 2012-2013.

Hollande said his two-day Australia state visit would also highlight "the presence of France in the Pacific Ocean region.

"We are in fact neighbours since France is present in Polynesia, the Wallis and Futuna islands and New Caledonia," he said, listing French territories.

"We want to remain present in this area for reasons of stability, of security and also for future development."

The French leader, who arrived from the New Caledonian capital Noumea after attending the G20 summit in Brisbane at the weekend, was to visit the capital Canberra on Wednesday.

In Noumea he vowed Paris would remain neutral in a self-determination referendum due to be held in the French Pacific possession by 2018.

"It's the Caledonians who will have the last word," Hollande told members of the local Congress on Monday.

He was due to meet Australian Prime Minister Tony Abbott on Wednesday when he would also lay a wreath at Australia's War Memorial.

Some 400,000 Australians -- 10 percent of the population -- fought in World War I and of the 60,000 who died, 40,000 of them fell in France.

Hollande will host a reception Tuesday evening at Sydney's iconic harbourfront Opera House for the French community, which has been boosted this year by 26,000 youngsters on working holiday visas.