Collins sub maintenance to remain in SA

Full-cycle maintenance of Australia's Collins Class submarines will remain in Adelaide as part of a landmark security pact with the United States and the United Kingdom, ensuring the retention of South Australia's skilled shipbuilding workforce, the federal government says.

Prime Minister Scott Morrison has also confirmed the Collins Class boats will remain in service for "decades and decades" to come, as changes to future plans appear set to delay the development of the nation's next fleet of submarines.

The federal government has scrapped a $90 billion deal with the French-based Naval Group to build 12 Attack Class submarines in Adelaide, the first of which was expected to enter service in the early 2030s.

It will now work with the UK and the US to build nuclear-powered subs, with a commitment to also base construction in Adelaide.

Mr Morrison said the commonwealth would invest $6.4 billion to both extend the life and maintain the Collins Class fleet, supporting about 1300 jobs in SA.

The government would also invest up to $5.1 billion in upgrades to the Hobart Class destroyer combat management systems, creating a further 300 jobs in Adelaide.

"This expansion of Australia's naval capabilities will strengthen national security, boost our sovereign workforce and support thousands of jobs in the South Australian industry," the prime minister said.

"South Australia is home to some of the most skilled shipbuilding workers in the world, they have the know-how, ingenuity, industrial knowledge and determination that is required to provide our Defence Force with the very best capability."

SA Unions state secretary Dale Beasley said a decision on the submarine maintenance work was welcome news for the hundreds of workers who had feared their jobs would be sent to Western Australia.

"That's testament to the effort put in by those workers to make the case for the superiority of their skills and expertise here in SA," he said.

But Mr Beasley said the decision was cold comfort to those working for or with Naval Group who would now be without work.

"Engineers, scientists, IT professionals, trades and clerical workers have moved to SA for these jobs, and some have even moved with their families to France," he said.

"What comes next for them."

Federal Finance Minister Simon Birmingham said with the Collins Class maintenance work and Hobart destroyer upgrades, SA would continue to be the "engine room" of naval shipbuilding in Australia.

"Conducting these sustainment projects in Osborne, on top of the building of frigates and submarines will ensure South of Australia continues to be the epicentre of naval shipbuilding in this country," he said.

Collins class submarine HMAS Farncomb will be the first to undergo life extension upgrades when it enters its next full-cycle docking in 2026.