Australia commits $3.9 billion down payment for Osborne submarine construction yard

February 16, 2026, by Fatima Bahtić

The Australian government has announced it will invest $3.9 billion as a down payment to deliver the new submarine construction yard in Osborne.

Australian Naval Infrastructure (ANI) projections show an estimated investment of $30 billion over the coming decades to build the construction yard in Osborne.

The Osborne construction yard will comprise three substantive areas, including fabrication, outfitting, and a further area for consolidation, testing, launching, and commissioning.

Enabling works and the Skills and Training Academy (STA) are expected to cost approximately $2 billion and more than $500 million, respectively.

Both state and federal governments are strengthening Defence investment in South Australia. This investment complements the existing Collins-class sustainment facilities and Hunter-class shipyard, also located in Osborne.

The total floor area of the new submarine construction yard is expected to be ten times larger than the existing Osborne South Development project. Construction is expected to use 126,000 tonnes of structural steel. The fabrication hall in Area 1 is 420 metres long.

According to the officials, all of these works continue at pace, with future investment decisions to follow as infrastructure needs are further defined, designs mature and licences are progressed across the yard.

The total construction costs associated with the infrastructure program will depend on the details of design and commercial delivery arrangements to be negotiated by Australian Naval Infrastructure (ANI), as the Government’s appointed design and delivery partner for the yard.

ANI is also delivering progress across the precinct with the recent completion of the construction of a new link road that will streamline access to the shipyards for thousands of workers.

“Together with the Malinauskas Government in SA, we are accelerating AUKUS opportunities to secure Australia’s future defence capability and create lasting prosperity and jobs for the state. Investing in the Submarine Construction Yard at Osborne is critical to delivering Australia’s conventionally-armed, nuclear-powered submarines,” Prime Minister Anthony Albanese said.

“From construction of the submarine yard to delivery of critical infrastructure and the development of a skilled workforce, progress is accelerating. The transformation underway at Osborne shows Australia is on track to deliver the sovereign capability to build our nuclear-powered submarines for decades to come,” Deputy Prime Minister Richard Marles stated.

“At least $30 billion will be invested at Osborne to construct the shipyard. That investment has already started flowing and is only set to grow. This is just the beginning. That figure only represents the task of building enabling infrastructure. There will be many billions more invested in the incredibly complex task of building nuclear-powered submarines, which will in itself provide for thousands of highly skilled, well-paid jobs for decades,” Premier of South Australia Peter Malinauskas commented.

Development of the submarine construction yard is coupled with the South Australian Defence Industry Workforce and Skills Action Plan, which has committed $300 million to workforce development initiatives aligned with the defense industry and the creation of Technical Colleges in South Australia.

To remind, in December last year, the government established a new Defence Delivery Agency to streamline capability acquisition and sustainment and improve accountability across major projects.