Australian-built military vehicles will help bolster the nation's defence forces as well as the Netherlands as part of a $1.2 billion cash splash with a major weapons manufacturer.
The two governments have ordered about 300 Bushmaster armoured vehicles, which will be built at Thales's Bendigo facility, north-west of Melbourne, over the next seven years.
The vehicles, deployed to great effect on the battlefield by Ukraine's armed forces, will be built at a rate of about 50 a year, Defence Minister Richard Marles said on Monday.
Australia will get 268 Bushmasters, while the precise number being sent to the Netherlands has not been disclosed.
"The Bushmaster is the very best protected mobile vehicle for armies anywhere in the world. It saves lives," Mr Marles said.
The $750 million announcement is expected to support the retention of 300 jobs in the regional Victorian town.
Another $450 million has been earmarked towards upgrades of Hawkei protected mobility vehicles, while the defence force's truck capability will bolster about 150 jobs for Thales in Brisbane.
The Bushmaster Protected Mobility Vehicle has also been exported to Fiji, Jamaica, Japan, New Zealand, the UK, Indonesia and the Netherlands and deployed in conflicts such as in Iraq War, Afghanistan and Syria.
Production of the vehicles helps Australia's standing with other countries, while also bolstering sovereign manufacturing, Mr Marles said.
This announcement follows a string of other commitments to increase Australia's defence spending.
The federal government on Tuesday announced it would spend as much as $7 billion over the next decade on counter-drone systems, including millions on a "Star Wars-like" laser technology powerful enough to burn through steel.
Australia's 2026 National Defence Strategy, unveiled in mid-April, set aside an extra $53 billion in funding over the next decade.
The move pushes Australia's defence spending to three per cent of GDP by 2035, compared to a previous forecast of 2.3 per cent, and comes after the US pressured its allies to increase their spends to 3.5 per cent of GDP.
According to Mr Marles, Australia's biggest peacetime increase in defence spending is necessary as Australia faces its most "complex and threatening" strategic circumstances since the end of World War II.
