Australia has committed A$3.9 billion (about US$2.76 billion) as an initial investment to progress construction of an Osborne shipyard that will underpin the AUKUS nuclear‑submarine program. The funds will finance enabling infrastructure while the yard continues maintenance on existing Collins‑class submarines. U.S.-commanded Virginia‑class submarines are planned to be based in Australia from 2027, with further sales and joint U.K.–Australia construction through the 2030s. Officials estimate the wider program could cost roughly A$30 billion over coming decades.
Australia Pledges A$3.9 Billion for Osborne Shipyard to Advance AUKUS Nuclear Submarines
Virginia-class fast attack submarine USS Minnesota (SSN-783) is seen off the coast of Western Australia, Australia March 16, 2025. COLIN MURTY/Pool via REUTERS
Australia announced on Sunday it will invest A$3.9 billion (approximately US$2.76 billion) as an initial payment to advance construction of a shipyard in Osborne, South Australia, that will support delivery of nuclear‑powered submarines under the trilateral AUKUS defence pact with the United States and Britain.
What Was Announced
Prime Minister Anthony Albanese described the A$3.9 billion as a down payment to deliver the new submarine construction yard in Osborne, a suburb of Adelaide. Officials say the funds will be used to build enabling infrastructure and prepare the site for the larger construction and assembly work to come.
"Investing in the submarine construction yard at Osborne is critical to delivering Australia's conventionally-armed, nuclear-powered submarines," Albanese said in a statement.
Program Timeline and Partners
Announced in 2021, AUKUS is Australia’s largest-ever defence investment. Under the arrangement, U.S.-commanded Virginia-class submarines are expected to be based in Australia from 2027, with several Virginia-class boats expected to be sold to Australia from around 2030. Britain and Australia will collaborate to design and build a new class of nuclear-powered submarines as the longer-term objective.
Osborne is the site where Australia’s government-owned ASC and Britain’s BAE Systems will work together to build the nation's future fleet. Until the new-build program ramps up later this decade, Osborne will continue to perform much of the maintenance on Australia’s existing Collins-class submarines.
Australian Prime Minister Anthony Albanese speaks during the 5th ASEAN-Australia Summit as part of the 47th ASEAN Leaders' Summit, in Kuala Lumpur, Malaysia, October 28, 2025. REUTERS/Chalinee Thirasupa/Pool
Costs, Review and Next Steps
Officials project the total cost of the shipyard build and related work at around A$30 billion "over coming decades." A December Pentagon review of the AUKUS project identified opportunities to strengthen the program, including ensuring Australia accelerates its timeline to develop domestic nuclear‑submarine capability.
South Australian Premier Peter Malinauskas said the initial payment would finance critical enabling works at the shipyard and called the announcement "just the beginning."
(Reporting by Sam McKeith in Sydney; Editing by Jamie Freed)
Conversion used in reporting: $1 = 1.4138 Australian dollars.
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