Australia has contracted the US-based RAND Corporation to complete a domestic design study for the navy's future submarine project, SEA 1000.
Australian Defence Minister Greg Combet said the government had decided to acquire 12 new future submarines, to be assembled in South Australia.
"This project will be the largest and most complex defence procurement undertaken in Australia's history," he said.
Under the contract, RAND will carry out a study to examine Australia's submarine design capability and capacity.
The government will consider the project strategy options taken from the results of the design study during 2010 and will ensure the country has the proper design capability to support the submarines throughout their life, Combet said.
The domestic design study for SEA 1000 is scheduled to be complete by February 2010.