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Prime Minister Malcolm Turnbull has announced all 12 of Australia's next fleet of submarines will be built in Adelaide from local steel, with France winning the hard-fought global race for the $50 billion contract.
Mr Turnbull said in Adelaide on Tuesday morning that the decades-long program would create about 2800 direct jobs and help Australia transition to a 21st century economy.
The new fleet, the first of which will hit the water in the early 2030s, will be built using Australian steel, he said, declaring the pledge "part of our plan for the jobs and growth of the 21st century".
"Over decades to come, the submarine project alone will see Australian workers building Australian submarines with Australian steel here, where we stand today, for decades into the future. Fifty years from now, submarines will be sustained [and] built here. Surface vessels will be built here because of the commitment we have made to this great national endeavour of building Australia's navy of the 21st century.
"We do this to secure Australia, to secure our island nation. But we do it also to ensure that our economy transitions to the economy of the 21st century."
He said the local build would ensure "that we have the technology and skills and the manufacturing" and would guarantee the "jobs of our children and grandchildren for decades to come".
The economic flow-on effects would be "immense", he said.
He said Defence experts' advice was "unequivocal" in favour of the French proposal.
French firm DCNS won the hard-fought contest over Germany and Japan to help design and build the fleet to replace the Collins Class fleet.
"The recommendation of ... the experts who oversaw [the process] was unequivocal. The French offer represented the capabilities best able to meet Australia's unique needs," Mr Turnbull said.
Mr Turnbull said that "the bulk of the work will be done here" in Adelaide though there would be a supply chain that stretched across the country and some components such as the US-made combat system will be sourced overseas.
Defence Minister Marise Payne said the new submarine fleet would form a "vital part of our naval capability to 2060 and beyond, well beyond the lifespan of most of us who are standing here today".
"National security has been the number one driver of this decision," she said. "It reflects the fact that we are a maritime-based trading nation and both our national and economic security are linked to the maritime environment of our region.
"We need submarines with considerable range. We need the capacity to remain undisturbed and undetected for extended periods of time. We need submarines that are quiet, that have advanced sensor technology to detect other submarines."
France's bid was seen as technically very strong, particularly its quiet propulsion system that uses a marine equivalent of a jet engine rather than a propeller.
DCNS makes a wide range of cutting-edge submarines, ranging from small attack boats to massive strategic nuclear missile submarines.
Their Shortfin Barracuda design will be a variant of an existing French nuclear-powered boat. It will be converted to a diesel-electric powered design.
The French were competing against designs by Japan and Germany. While former prime minister Tony Abbott favoured Japan, there were concerns that the country lacked experience in exporting such complex military hardware.
Rather Japan's bid rested partly on strategic arguments, in that it would bring two of the major democracies in Asia closer together at a time of rising instability caused by the emergence of China as a major power.
