Defence Industry Minister Pat Conroy announced a deal to develop naval and air-launched Joint Strike Missiles (JSM) at a plant north of Sydney.
The factory will break ground later this year, producing anti-ship cruise missiles and JSMs that can be fitted to state-of-the-art F-35A aircraft.
“This is about investing in our advanced, high-tech manufacturing industry and developing our sovereign defence industrial base,” said Conroy.
A defence official told AFP the factory would begin production in 2027 and be capable of producing 100 missiles annually.
Norway’s Kongsberg developed both missiles.
Concerns about China’s massive defence spending and Russia’s invasion of Ukraine have led many US allies to voice concern about a shortfall in munitions manufacturing capabilities.
Australia is among several Asia-Pacific nations that are dramatically increasing defence spending.
Asian defence spending reached a record US$510 billion in 2023, according to the International Institute for Strategic Studies, a London-based think tank.
Australia has launched a string of ambitious defence projects, including the development of a fleet of nuclear-powered submarines.