PRIME Minister John Howard has announced the government has signed the contract to build two new warships in a deal worth $3.1 billion.
Mr Howard said the government had signed a contract with shipbuilder Tenix to build two large amphibious ships for the Royal Australian Navy.
He made the announcement at Tenix's shipyard in Williamstown in Melbourne.
The first ship, HMAS Canberra, will be delivered in 2013 and the second, HMAS Adelaide, in 2015.
Mr Howard said the project would add another 500 jobs at Tenix in Melbourne, where the construction of the superstructure and the majority of the fit-out of the ships will take place.
The work in Melbourne will be worth about $500 million to Australian industry.
Combat system work for the ships will be carried out in Adelaide, bringing up to $100 million into the South Australian economy, Mr Howard said.
"This contract, costing about $3.1 billion over eight years, will draw on the strengths of Australian industry to provide two of the most advanced ships of this type in the world," Mr Howard said in a statement.
"The first ship, HMAS Canberra, will be delivered in 2013 and the second, HMAS Adelaide, in 2015.
"These 27,000-tonne ships will greatly enhance Australia's ability to deploy forces when necessary in our region or beyond, and to provide assistance in time of natural disaster."
Mr Howard said each ship would carry integrated helicopters and watercraft and would be able to land around 1,000 personnel and new Abrams tanks, as well as artillery and supplies.
They would also be equipped with medical facilities, including two operating theatres and a hospital ward.
Mr Howard said the project would provide the Australian Defence Force with enhanced capability and also support a critical Australian industry.
"It will offer Australian defence firms unparalleled prospects in the areas of electronics, design development, systems engineering and integration, employing Australians in a range of high-value engineering, shipbuilding and project management roles," he said.