Given the precedent it sets, experts have been calling for clear rules to prevent the proliferation of dangerous nuclear technologies amid longstanding but fragile pacts.

The deal will see Australia replace its diesel-powered submarines with nuclear-powered ones, first through purchases from the United States "over the course of the 2030s" and later with domestically produced vessels in the early 2040s.

In the meantime, Australian sailors, engineers and other personnel will be training with their US and British partners to acquire expertise, while British and US submarines make regular visits to Australian ports.

- Highly enriched uranium -

The conventionally armed, nuclear-powered Virginia class vessels Australia will buy from the United States are powered by a nuclear reactor that allows them to recharge their batteries indefinitely.

The submarines are fuelled by high-enriched uranium (HEU) at more than 93 percent -- a level which is slightly higher than what is needed to make a bomb.

French nuclear-powered submarines, however, use low-enriched uranium (LEU) fuel.

One of the key nuclear proliferation worries is "how the transfer and control of HEU fuel and HEU reactors for nuclear propulsion in a military vessel are handled", said Daryl Kimball, director of the American organisation Arms Control Association.

To dispel proliferation concerns, AUKUS parties have agreed to provide Australia with "complete, welded power units", said the Vienna-based UN nuclear watchdog, which seeks to ensure that "no proliferation risks will emanate from this project".

- Legal concerns -

The International Atomic Energy Agency -- which has never been confronted with this type of situation -- on Tuesday stressed that the "process involves serious legal and complex technical matters".

China also warned that the trilateral AUKUS alliance was treading a "path of error and danger" after they unveiled their submarines deal.

Through technical measures, the IAEA fulfils its mission to "independently verify a state's legal obligation that nuclear facilities are not misused and nuclear material is not diverted from peaceful uses".

But in specific cases, such as nuclear propulsion, a state has the right to exempt fissile material from IAEA safeguards for reasons of protecting sensitive military information.

Australia, therefore, will have to make "an arrangement" with the UN watchdog to be able to use nuclear material "such as nuclear propulsion for submarines".

"The three countries and the IAEA must now devise a procedure that can serve as a precedent," said Emmanuelle Maitre of the Foundation for Strategic Research.

"They will invent the rules of the game with the IAEA and it is in their interest to establish sufficiently binding procedures," she stressed.

- Snowball effect -

Even though the proliferation risks associated with Australia are "a priori fairly tenuous, the theoretical risk is important," Maitre stressed.

The challenge at hand is to avoid creating loopholes, which could potentially be exploited by countries that invoke AUKUS, experts say.

Former IAEA official Tariq Rauf said he was surprised that the UN watchdog has not "developed a generic nuclear approach to nuclear submarines" a year and a half after the project announcement.

"How will the IAEA implement its obligations? What access will the IAEA have? What information will they get? We don't have an answer to that," Rauf told AFP.

The concern is that "powerful states can influence an international organisation," he added.

If discussions are "not done properly, it could set a bad precedent," Kimball warned, urging the United States to "not push for any exemptions for the nonproliferation rules".

The AUKUS deal could potentially also add to the proliferation of ballistic missile and cruise missile capabilities among East Asian countries, he added.