Hunter business and industry groups have hailed the federal government's investment in a Hunter missile factory as a key move towards establishing a defence "cluster" in the region.
The government announced on Thursday that it would partner with Norwegian arms maker Kongsberg to build a factory at Newcastle Airport under an $850 million deal to supply strike missiles for the nation's war ships and F-35 fighter jets.
The 9000-square metre Williamtown plant will be the first large-scale missile factory in Australia.
The $200 million plant is forecast to employ about 100 people when operating and 500 workers during construction at the airport's new Astra Aerolab business park.
The NSW government is assessing the project as a state significant development.
The development application says the building includes 5700 square metres of production space and 2300 square metres of office space.
"The facility is to be used for hardware manufacture, assembly, integration, testing, verification of defence-related components and maintenance, software development and administration to assist in the delivery of defence acquisition programs," the application says.
Hunter Defence Taskforce chair Tim Owen said Williamtown was one of several options Kongsberg had considered for the Naval Strike Missile and Joint Strike Missile production plant.
"It's about jobs for the region and economic uplift," Mr Owen said from the Hunter Defence Conference in the vineyards on Thursday.
"Importantly, it's about organic sovereign capability for the country rather than relying on global supply chains.
Mr Owen said the benefits of Australia's new missile-building program were already flowing through to Hunter companies such as Cardiff engineering firm Nupress.
"Kongsberg already have one local supplier who's doing the missile bodies for them right at the moment for the NSM," he said.
The missiles are likely to be assembled at Williamtown from mostly overseas-made components at first, but Mr Owen said that was expected to change over time.
"There is certainly a large Australian content piece that's going to be moving forward," he said.
"There's a lot of working going on at the moment discussing what can we and do we need to produce in this country.
"The warheads are not going to be physically made here, but, when you look at sensors, systems integration, missile body, motors, how do we bring all of this together in country?"
Mr Owen said the Hunter had the "beginnings of an industry cluster" which could attract defence businesses from outside and benefit existing companies across the region.
"This is the first factory and the only one outside of Norway where they're doing this whole production, and that in itself has a level of attraction," he said.
"Getting the agreement out of the government and Department of Defence was the first step.
"Now the hard work starts at a commercial level of how do we attract and how do we sustain the capability."
The government plans to double spending on the Australian Defence Force over the next 10 years as part of the 2024 National Defence Strategy.
Business Hunter chief executive Bob Hawes said the plant would help broaden the region's industrial base and skills.
"It's a smart thing to do for the region on the basis that, if defence is going to be an area governments are going to be spending money on in future years, if we can get our foot in the door and show we can do what's required, I think that will hold us in good stead," he said.
"And it will add to that diversification base we need as we start to potentially wind out of energy-related industries that won't be around forever."
The government announced in January that it had signed a contract with Lockheed Martin to make a first batch of Guided Multiple Launch Rocket System missiles at a small munitions facility in western Sydney from 2025.
