Australia and the US will develop hypersonic cruise missiles in a move aimed to counter China and Russia which are building similar advanced weapons.
Defence Minister Linda Reynolds said the missiles were needed to deter "aggression" against Australia's interests.
"We will continue to invest in advanced capabilities to give the Australian Defence Force more options to deter aggression against Australia's interests," Senator Reynolds said.
READ MORE: China aiming to double size of its nuclear arsenal
She did not reveal the cost of developing the missiles or when they would be operational.
In the Federal Government's defence review announced earlier this year, Australia set aside up to $9.3 billion for high-speed, long-range missile defence systems, including hypersonic research.
Hypersonic missiles can travel at more than five times the speed of sound and the combination of speed, handling and altitude makes them difficult to track and intercept.
She did not reveal the cost of developing the missiles or when they would be operational.
READ MORE: China state media publishes new cartoon mocking Australia
China is close to deploying, hypersonic systems armed with conventional warheads, according to defence analysts.
Last year Russia fielded its first hypersonic nuclear-capable missiles, while the Pentagon aims to roll out similar weapons by the mid-2020s.
Australia said in July it would boost defence spending by 40 per cent over the next 10 years to buy longer-range strike capabilities across air, sea and land.
But Australia's collaboration with the US on missile development, however, could inflame tensions with China.
Relations between Canberra and Beijing hit a new low after a senior Chinese official posted a fake image of an Australian soldier holding a knife to the throat of an Afghan child.
Today a cartoon was shared that depicts an Australian soldier standing over a body.
Biden aide pledges support for Australia
Meanwhile, one of US President-elect Joe Biden's top advisers has declared that the US will continue to stand "shoulder to shoulder" with Australia in an apparent response to China's hostility.
Jake Sullivan, whom Mr Biden has selected to be his national security adviser, has tweeted that the US will stand "shoulder to shoulder" with its long-time ally.
https://twitter.com/jakejsullivan/status/1334173397035741189?ref_src=twsrc%5Etfw"The Australian people have made great sacrifices to protect freedom and democracy around the world.
"As we have for a century, America will stand shoulder to shoulder with our ally Australia and rally fellow democracies to advance our shared security, prosperity, and values."
Mr Sullivan previously advised Mr Biden on national security issues when he was vice-president during the Obama administration.
- With CNN
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