The Royal Australian Navy’s Anzac-class frigates will be upgraded with an advanced anti-ship missile defence system, defence minister Stephen Smith and defence materiel minister Jason Clare have revealed.

The upgrade of all eight Anzac frigates has a potential value of $650m, which includes funds that were already spent on the overhaul of HMAS Perth.

The anti-ship missile defence system consists of an enhanced 9LV combat management system, phased array radar and missile director, infrared sensors and an advanced navigation radar system.

The new system will be able to identify, track and guide missiles to multiple targets simultaneously as well as defend the ship from cruise missile attacks.

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SAAB Systems along with BAE Systems and the Defence Materiel Organisation will carry out the upgrade installation and integration work, which is scheduled to be completed by 2017.