Australia will pay $1.7 billion to acquire a fleet of cutting-edge autonomous submarines known as “ghost sharks”.

Defence Minister Richard Marles announced on Wednesday that the Department of Defence and Anduril Australia had signed a five-year contract to deliver, maintain and further develop the subs, also known as underwater drones.

He described the ghost shark as a “world-leading platform” that would significantly boost Australia’s under-sea warfare capabilities.

“The Albanese government’s investments in the ghost shark are fast-charging the development of long-range, undersea autonomous vehicles for our Navy while also backing Australian businesses,” Marles said.

“Over the next five years and beyond, the ghost shark will equip Navy with the intelligence, surveillance and strike capabilities it needs in an increasingly complex strategic environment.”

The ADF and Anduril have already spent three years collaborating on development of the ghost shark, with Marles saying Wednesday’s announcement built on about $140 million the Australian government had so far invested in program.

He would not comment on potential future missions for the stealth submarines, saying the government would be “very coy indeed” when it came to describing exactly what they will do.

However, he said the first tranche would arrive in January 2026, and dozens would be built over the next five years.

The contract will support about 120 existing jobs and create more than 150 highly-skilled long-term jobs at Anduril Australia, according to the government.

It said there were more than 40 Australian companies working as part of the ghost shark supply chain. These are expected to add a further 600 jobs as a result of the new investment.

Three ghost shark prototypes have already been built.

The subs are designed to conduct intelligence, surveillance, reconnaissance and strike operations. Image: Department of Defence

The drone subs will operate alongside Australia’s naval fleet and can be used with its submarines, including nuclear-powered vessels it will acquire from the US in the 2030s.

Navy chief Mark Hammond said the ghost shark could be launched from shore and from warships.

The vice-admiral said he was confident Australia and its allies “will continue to enjoy a capability advantage” in undersea warfare as nations such as China develop sophisticated drones and submarine detection technologies.

“My personal belief is that the undersea battle space will continue to be increasingly congested, increasingly contested,” he said.

Anduril said the ghost shark’s entry into full-rate production marked “the start of a new era of seapower through maritime autonomy”.

“For years, Australia has faced the persistent and threatening presence of Chinese naval assets in its home waters,” the company said.

“Ghost shark is the instantiation of a Program of Record for AUVs that can directly address this challenge through coastal defence patrols and area-wide domain awareness powered by artificial intelligence at scale.

“Success in this effort would be a landmark opportunity to demonstrate the potential of autonomous seapower to address clear and urgent national security problems.”

–with AAP