The AUKUS pact aims to arm Australia with a fleet of cutting-edge submarines from the United States and would provide for cooperation in developing an array of warfare technologies.

The investment in the Submarine Construction Yard at Osborne, near the southern city of Adelaide, "is critical to delivering Australia's conventionally-armed, nuclear-powered submarines", Prime Minister Anthony Albanese said in a statement.

In the long term, an estimated AU$30 billion is expected to be spent on the facility.

The submarines, the sale of which will begin in 2032, lie at the heart of Australia's strategy of improving its long-range strike capabilities in the Pacific, particularly against China.

The deal could cost Canberra up to US$235 billion over the next 30 years and also includes the technology to build its own vessels in the future.

Australian defence minister Richard Marles said the new facility would be at the heart of that.

"The transformation underway at Osborne shows Australia is on track to deliver the sovereign capability to build our nuclear-powered submarines for decades to come," he said.

Australia had a major bust-up with France in 2021 when it cancelled a multi-billion-dollar deal to buy a fleet of diesel-powered submarines from Paris and go with the AUKUS programme instead.