Australia is to partner with the US and UK in a groundbreaking pact in adopting a new nuclear-powered submarine fleet widely seen as a direct response to China's growing threat in the region.
The move, which was announced Thursday morning by Prime Minister Scott Morrison, will see the three countries share intelligence on a range of matters including artificial intelligence, cyber, underwater systems and long-range strike capabilities.
"Our world is becoming more complex, especially here in our region - the Indo-Pacific. This affects us all. The future of the Indo-Pacific will impact all our futures," Mr Morrison told reporters.
He was joined by US President Joe Biden and UK Prime Minister Boris Johnson via video link.
The security deal will see the group called AUUKUS and will also see the $90 billion French submarine deal scrapped. Mr Morrison said the submarines would be developed in Adelaide.
"Our nations will update and enhance our shared responsibility to take on the threats of the 21st century, just as we did in the 20th century - together," Mr Biden said.
While there will be no official mention of China, ABC political correspondent Greg Jennett said it was "all about" the communist nation.
Ashley Townsend, director of foreign policy and defence programming at Sydney's United States Centre told Politico it was evidently a move from the three countries to increase protection in the Indo-Pacific.
“It suggests a new and more strategic approach to working collectively with allies on Indo-Pacific defence priorities," he said.
"This is a surprising and extremely welcome sign of the Biden administration’s willingness to empower close allies like Australia through the provision of highly advanced defence technology assistance — something that Washington has rarely been willing to do."
Zack Cooper, a senior fellow with the American Enterprise Institute, told ABC News Breakfast it was a "major step" for a coalition of countries to tackle ongoing geo-strategic issues.
"We need Australia to be doing more in its own region, and this is the kind of capability that will let Australia do that."
China-Australia feud continues
China has reacted angrily in recent months to commentary from the Morrison government, accusing several key officials of "hyping" the so-called China threat.
"We are grappling with a regional environment far-more complex and far-less predictable than at any time since the Second World War," he said last Wednesday.
A furious Foreign Ministry spokesperson Zhao Lijian branded Mr Dutton's remarks as "extremely dangerous and irresponsible behaviour" and said he "wished for nothing more than trouble".
The announcement comes as China itself has ramped up its own nuclear submarine capacity, including a vastly expanded facility near Beijing where it can produce multiple subs at once.
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