PM flags defence focus in federal budget

Australia's national security will be a key part of the federal budget as the government prepares to receive a review on the nation's defence arrangements.

But Prime Minister Anthony Albanese would not confirm reports his government was prepared to spend up to $1 billion on sea mines, high-tech underwater weapons.

The Department of Defence confirmed it was "accelerating the acquisition of smart sea mines".

"A modern sea mining capability is a significant deterrent to potential aggressors," a defence spokesperson said.

The spokesperson said the weapons had different capabilities to "indiscriminate" land mines and could distinguish military targets and other types of ships.

Meanwhile, defence sources told the Sydney Morning Herald the government had signed a contract worth between $500 million and $1 billion for a large number of sea mines provided by a European supplier.

But Mr Albanese said he would not pre-empt advice expected from a strategic review being conducted by former defence minister Stephen Smith and former defence force chief Angus Houston.

Defence Minister Richard Marles is expected to receive the review's report in February.

"What that (report) is aimed at doing is making sure that every single dollar that's spent in defence is spent in the best possible way to support our national security," Mr Albanese told ABC News on Monday.

The prime minister said the report, expected to be handed to the government soon, would also look at how Australia could shift defence strategies from traditional land-based conflict to modern warfare.

"We are looking at missile defence ... at cybersecurity, we're looking at all of these issues," he said.

"We need to make sure we have the best possible defences."

The federal budget, due in May, is expected to include funding for the recommendations made by the strategic review.