Australia will start manufacturing Guided Multiple Launch Rocket System (GMLRS) missiles this month with the opening of a new factory at Port Wakefield in South Australia.
The precision-guided missiles have a range of more than 70km, according to Lockheed Martin.
Defence Industry Minister
Pat Conroy says it's the first factory of its kind outside of the United States that will produce these types of missiles.
Speaking to
ABC Radio National Breakfast, Conroy says the initial factory will supply weapons to the Australian Defence Force.
He says the government intends to build a bigger factory that can produce weapons that can be exported to the US.
"This is a very significant announcement that also increases our sovereignty and self-reliance, makes us less dependent on overseas supply lines," Conroy says.
"It means more independence and sovereignty for us. It means we get these rounds cheaper because we've got a bigger scale and it means more jobs for Australians," he says.
He says Australia is facing uncertain strategic circumstances amid a significant arms build-up in the region.