Prime Minister Anthony Albanese has brushed off remarks by his French counterpart that Australia is provoking "nuclear confrontation" with China over the deal.
French President Emmanuel Macron, joining Mr Albanese in Bangkok for the APEC summit, criticised his predecessor Scott Morrison for his decision to ditch a submarine contract with French shipbuilder Naval Group.
Instead, Australia will acquire submarines under a new partnership with the UK and US (AUKUS), a decision which damaged the Franco-Australian relationship last year.
France temporarily recalled its ambassador from Canberra and Mr Macron told Australian reporters Mr Morrison had lied to him.
Mr Macron told reporters the deal France had with Australia involved building a submarine fleet "in-house".
He said the agreement to build submarines for Australia had not been about confrontation with China.
"Australia will maintain the submarines themselves, and it is not confrontational to China because they (proposed French model boats) are not nuclear-powered submarines," he told reporters.
"But the choice made by (former) prime minister Morrison was the opposite, re-entering into nuclear confrontation."
The French president said Mr Morrison had made Australia "completely dependent" on other nations because Australia could not produce or maintain the submarines acquired under the AUKUS deal.
Asked about France's offer to supply diesel-powered submarines to Australia, Mr Macron said: "It is known, it is still on the table", adding that talks were ongoing on the modalities of a potential deal.
Mr Albanese insists Australia maintains a co-operative relationship with France but the AUKUS deal is going ahead.
"He's entitled to make whatever comments he wants as the leader of France," Mr Albanese told reporters in Bangkok.
"Australia has not decided to change the strategy on the subject ... we are proceeding with the AUKUS arrangements, there's nothing ambiguous about it."
A decision on whether Australia will go with a British or American submarine design will be made in early 2023.