Australia will spend an initial AUS$12 billion (US$8 billion) to upgrade shipyard facilities for a future fleet of nuclear-powered submarines, Canberra said on Sunday.

The investment is to be spent over a decade to transform a shipbuilding and maintenance precinct in Perth, Western Australia, Defence Minister Richard Marles said.

The government is ploughing money into Perth's Henderson Defence Precinct after signing the 2021 AUKUS pact with Britain and the United States to arm its navy with nuclear-powered submarines.

Australia, which has no infrastructure to service nuclear-powered submarines, aims to acquire at least three US Virginia-class submarines within 15 years and eventually to manufacture its own subs.

"Henderson is very much an AUKUS project. It is where we will do sustainment and maintenance of our future submarines," Marles told a news conference.

"I have got no doubt this decision will be welcomed in the United States, as it will be welcomed in the United Kingdom, because it is another step down the AUKUS path," the minister said.

The United States is also expected to use the shipyard for maintenance of its own nuclear-powered submarines.

The shipyard expansion is the latest in a string of high-profile Australian defence upgrades.

Australia announced in August it would equip its navy with 11 Mogami-class frigates built by Japan's Mitsubishi Heavy Industries.

The first three Mogami-class frigates will be built overseas, but Australia hopes to produce the rest in Western Australia. (AFP)