Prime Minister Tony Abbott is set to announce a $20 billion plan to build future frigates in Adelaide as the government looks to restore its political fortunes in South Australia.
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Mr Abbott will guarantee the ships will be built in the South Australian capital as part of an $89 billion naval ship and submarine building program.
A cabinet meeting in Adelaide on Tuesday morning is expected to sign off on the pledge.
Mr Abbott said on Tuesday a program to construct frigates, patrol vessels and corvettes would secure "up to 2500 ongoing jobs in surface naval shipbuilding".
"This is the first time in Australian history that a government has made a commitment to build not just a ship or a class of ships in Australia but to continuously build Australia's surface fleet here in Australia," he told Adelaide radio station 5AA.
"This is a very, very significant announcement, it is a historic change and the people of South Australia in particular should be very pleased that finally a government has bitten this particular bullet."
He said the announcement did not mean the government was ruling out any work for South Australians in building a new submarine fleet.
Mr Abbott said the countries in line for the contract – Germany, France and Japan – had been asked to submit options for a local build, a hybrid build and construction entirely offshore.
"When we get those bids in we'll make the best possible decision," he said.
"But certainly the decision today in no way precludes a local build of submarines."
The announcement was foreshadowed in News Corp's Adelaide paper The Advertiser ahead of Tuesday morning's cabinet decision.
The government is looking to restore its approval ratings in South Australia, where voter support has plummeted.
