New navy refuelling ships will be built offshore, with the Abbott government giving first preference to Spain and South Korea.
Defence minister David Johnston has announced the tender process for the urgently needed replacements of replenishment vessels HMAS Success and HMAS Sirius – but Australian shipbuilders won't be able to bid.
Instead, the battle will be between Spain's Navantia and South Korea's Daewoo Shipbuilding and Marine Engineering.