Submarine decision coming soon: Turnbull

The government is moving closer to a decision on who will build the next generation of submarines.

Prime Minister Malcolm Turnbull says a decision on Australia's biggest ever defence contract will be made shortly.

A process is under way involving Japan, Germany and France to select a tenderer to build the next generation of submarines.

Industry Minister Christopher Pyne on Monday suggested the winner would be announced before the election, which could be held on July 2 if Mr Turnbull opts for a double-dissolution.

Mr Turnbull told reporters on Tuesday in Sydney, where he is chairing a cabinet meeting, that the evaluation process was being conducted in a "very thorough way".

"Announcements about that will be made shortly," he said.

Opposition Leader Bill Shorten told reporters in Perth the government needed to fulfil its 2013 election promise to build 12 submarines in Australia.

"Our test is straightforward for submarines - build them here, maintain them here, sustain them here," he said.

The first of the new submarines, which replace the Collins class, are due to come into service in the early 2030s.