This follows reports of an Indonesian troop build-up along the border from communities in PNG's West Sepik province.
Indonesian-ruled West Papua has been gripped by weeks of protests and violent unrest which has left dozens of people dead.
Amid a security forces crackdown, concern has been raised in neighbouring PNG about another potential influx of West Papuan refugees
PNG's Immigration and Citizenship Authority has advised that following a shootout the border is closed to nationals from both sides until further notice.
It said shopping at the Batas market, close to the border on the Indonesian side, as well as movement into the West Papuan capital Jayapura was "completely banned".