The 10-year deal will boost capacity at the Rolls-Royce factory in Derby and bankroll the design costs of a new class of boats that Australia will build.

Defence Minister Richard Marles and UK counterpart Grant Shapps are in Adelaide today as announcements confirmed that ASC and BAE Systems will build Australia’s nuclear-powered submarines at the Osborne shipyard in Adelaide.

The UK defence and foreign ministers are here for talks with their Australian counterparts at an annual AUKMIN meeting.

At least $2 billion has already been allocated to build a submarine construction yard at Osborne, while at least $30 billion will go into propping up Australia’s industrial base over the next three decades.

The Australian Submarine Corporation will work with American and British industry to bolster its ability to sustain and operate nuclear-powered submarines.

Under the agreement, Australia will acquire at least three US Virginia-class nuclear submarines from the early 2030s under an AUKUS agreement that includes the UK.

Doubts about that delivery deadline surfaced last week when the US said it would only build one of the submarines a year until at least 2028, raising questions about its ability to supply both the US Navy and RAN.

Besides the more than $4 billion Australia will pay the UK for submarine work, it is paying the US another $3 billion to help its submarine production.

The AUKUS nations will also collaborate on the design and building of a new fleet of submarines.

“This is not a normal procurement, we are not going off to a shop to buy an item,” Marles said.

“This is a partnership between three governments which is intended to last forever and a partnership which will involve the most developed industrial production line in our country.”

Shapps defended the costs, saying the complicated program wouldn’t happen overnight and would create thousands of jobs over decades.

“Nuclear-powered submarines are not cheap but we live in a much more dangerous world where we are seeing a much more assertive … China,” he said.

“We live in a much more dangerous world all around with what’s happening in the Middle East and Europe and countries need to invest in making sure that adversaries see that we’re serious about our security.”

Australia will build the submarines in Adelaide but the nuclear reactors used for propulsion will be built by Rolls-Royce in the UK.

The AUKUS-class submarines will stem from a UK design with input from all three nations, including the embedding of a US weapons system.

Pilot programs include non-destructive testing traineeships to boost the number of testing technicians, welding and fabrication initiatives and international placements.

ASC chair Bruce Carter said the decision “assures Australia’s sovereign submarine capability for generations to come”.

“ASC has proven over its 35-year+ history that it has the capability to establish a shipyard, assemble a skilled workforce, develop a robust sovereign supply chain, and build an entirely new class of submarine – the Collins Class, our first-ever Australian-built submarine,” he said.

“ASC has the skills, knowledge and experience to replicate that feat within the nuclear-powered submarine program.”

ASX managing director and CEO Stuart Whiley said the decision marked “the beginning of an exciting new era for our company”.

“As Australia embarks on the most significant phase in its shipbuilding history, it’s time to rekindle the enthusiasm and optimism that accompanied the initial Collins Class build,” he said.

“I encourage young people and businesses to seize the opportunities presented by the nation’s new nuclear-powered submarine program.

“I am proud of the workforce that ASC has built; it is made up of engineers, tradespeople and corporate staff with unique skills working to the highest levels of safety, quality and technology.”

Premier Peter Malinauskas said he was “thrilled” with confirmation about the local build.

“I saw first-hand BAE Systems’ incredible nuclear submarine building capability at Barrow-in-Furness last year. The scale and complexity of the exercise was mind-blowing,” he said.

“ASC brings its own unique capabilities. The Australian company has a significant workforce at Osborne and a strong history building and sustaining the Collins class submarines.

“We are getting on with the task of partnering with the Commonwealth on making sure we can meet the challenge of delivering the skilled workforce required for this massive undertaking.”

– with AAP