Wearable sensors that record a soldier's movements will be developed in Adelaide and deployed to the battlefield.
Defence Industry Minister Christopher Pyne says the sensors, which are similar to aircraft black boxes, will record data and act as emergency beacons helping find soldiers who have been injured or killed.
"Survival rates for battlefield casualties are closely tied to response times and the Fight Recorder will enable defence to quickly locate and treat casualties," Mr Pyne said in a statement on Thursday.
The minister said the boxes would also collect battlefield data which would help with the design and evaluation of new equipment and protective wear for soldiers.
Two companies will develop the sensors, one an Adelaide start-up and one based in New Zealand.
They beat 47 firms to win the contract and will share $700,000 from the government's next generation technology fund.
Once the technology has been fully developed, Mr Pyne said it could have wider, non-military, uses including emergency services and law enforcement.
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