The improvements will include major runway extensions, fuel stockpiles and engineering to support large aircraft, like US Air Force B-52 strategic bombers and RAAF KC-30 air-to-air refuellers.
Prime Minister Scott Morrison will announce the upgrades at the base near Katherine on Friday, with the funding expected to deliver a potent air combat capability.
“It will be integral to our alliance with the United States, and increase the reach of Air Force capabilities in the Indo-Pacific,” he said in a statement.
Morrison said RAAF Base Tindal would support critical Defence operations including air combat missions and responding to natural disasters.
“This investment is all about keeping Australians safe and putting Australians in jobs,” he said.
Under the redevelopment, $737 million will go towards extending the runway, building a new air movements terminal and extra fuel storage facilities.
An additional $437 million will pay for engineering services on the base including power, water and sewage, and 108 new live-in units for Australian Defence Force personnel.
The money comes on top of $495 million already spent at the base on a new air combat capability to support the arrival of F-35A Joint Strike Fighters in coming years.
More than 300 jobs are expected to stem from the new project’s initial construction phase.
If federal parliament ticks off on the upgrade, construction will start in the middle of this year and take more than seven years to finish.
Defence Minister Linda Reynolds said Tindal was crucial to Australia.
“The 2016 Defence White Paper identified Northern Australia as strategically important, both for national defence and as a forward base for regional engagement,” she said.
Defence’s managing contractor will be required to maximise the use of local industry from Katherine and the NT.
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