The contract was signed during a ceremony at HMAS Stirling, Garden Island in Western Australia on 13 October.
The Henderson -based centre is expected to be fully operational by the third quarter of fiscal year 2023.
It is the second of four maintenance centres to be established under the RAN’s Future Maritime Sustainment Model as part of Plan Galileo.
Once established, the RMC West will generate around 150 full-time direct work opportunities as well as hundreds of indirect jobs in the Western Australian region.
Under the initial $20.53m (A$32m) contract, NSM will be responsible for the sustainment of the RAN’s warships, beginning with the Arafura-class offshore patrol vessels.
The contract also has an additional option, which if exercised, would increase the value to $192.5m (A$300m).
The potential work expansion will include the maintenance of Anzac-class frigates and Auxiliary Oiler Replenishment ships.
Defence Naval Shipbuilding and Sustainment Group deputy secretary Tony Dalton said: “NSM will be the key link between Defence and industry to boost this local sustainment capability, providing more, and longer-term, work packages and jobs for local industry.
“This contract is just one part of the ongoing investment in the Henderson region to bolster Defence sovereign capability and industry participation.
“As part of the naval shipbuilding enterprise, we are also building a number of ships at Henderson and investing in new facilities across the precinct.