Defence company SAAB Australia is teaming up with the University of South Australia to open a new defence-focused training institute in Adelaide.
Defence Industry Minister Christopher Pyne says SAAB Australia will invest $40 million in the purpose-built centre at its Mawson Lakes headquarters.
He says this will help meet a rising demand for skilled defence industry workers for projects like the replacement of the navy's six Collins Class submarines.
"This will also build on our indigenous defence capability and provide a developing workforce for future export contracts," he said in a statement on Thursday.
UniSA and SAAB Australia have already been collaborating, with some students given the chance to work on projects at the company, but the new facility will allow more to be involved.
Construction on the institute will begin next year and it is expected to open in 2019.