The Albanese government will announce it has set aside $400 million for retention bonuses to help reduce the thousands of personnel leaving the armed forces.

Permanent ADF members will be eligible to receive a $50,000 bonus payment near the end of their initial mandatory period of service, if they commit to the military for another three years.

Under the scheme, 3400 personnel will be able to benefit within the first three years.

The government has identified recruitment and retention of personnel as an immediate priority in response to the defence strategic review.

But frequent postings uprooting families to different regions across the country, and a lack of career and employment opportunities for military spouses, are among the biggest issues for personnel.

"Defence is facing significant workforce challenges ... this is an acute issue for Defence and is reflective of broader national challenges," the review reads.

A $2 million review of defence housing will also take place to help improve home ownership rates among serving personnel.

Defence Minister Richard Marles said the department was facing greater challenges to recruit and retain its workforce than it has for decades.

"The Albanese government is steadfast in its commitment to achieving these goals, as outlined in our response to the defence strategic review," he said.

"There is a lot of work to be done, but these investments will be an important step towards ensuring we have the highly-skilled defence force needed to keep Australians safe."

Defence Personnel Minister Matt Keogh said the tight unemployment environment made it more difficult to recruit people.

"This bonus will ensure Defence retains its greatest capability - its people," he said.

Australian Associated Press