The Morrison government said Datapod, an Australian-owned company based in Fyshwick, would provide the defence force with modular data centres, which allow the military to store the equipment in a way that can be deployed on demand.

Defence Industry Minister Melissa Price said the centres would let Australian defence forces respond at short notice to challenges or threats.

"Investment in Australia's sovereign industrial capability is essential to ensure Defence can effectively respond at short notice to whatever challenges or threats it faces," Minister Price said.

The Defence Force needed to be agile and responsive at all times, she said.

"This funding recognises the need to have assets on-hand that can be deployed and re-deployed to meet operational needs, without unnecessary delays caused by constructing facilities with a long lead time.

"This investment also secures local jobs and assists with expanding sovereign manufacturing capacity so that it may assist Defence capability needs in the future."

ACT Liberal senator Zed Seselja said Datapod was a prime example of Canberra's thriving defence industry community.

He said the government's investment in Canberra's defence industry would support local jobs and skills, and keep members of the city's defence industry community engaged in developing cutting-edge technologies for the Australian Defence Force.

Datapod has previously supplied data centres that integrate with Defence's existing and planned operational platforms and IT equipment.

READ MORE:

Data centres are usually brick-and-mortar buildings to house computer equipment, but the Datapod data centres can store the technology while being deployed as needed.

Company managing director Scott Carr said the contract would give the business certainty to invest in developing advanced technology and in its facilities.

"This order is great because it allows us to continue our steady state production and further drives down our unit cost of production. Having that steady state of production makes us more internationally competitive," Mr Carr said.