A decision to build 12 submarines in Adelaide will pave the way for a world-class advanced manufacturing sector in South Australia, Premier Jay Weatherill says.
Prime Minister Malcolm Turnbull on Tuesday announced the vessels would be built in Adelaide by French company DCNS, which edged out bids by Germany and Japan.
The long-awaited announcement follows recent commitments to build frigates and offshore patrol vessels in Adelaide over the next decade, providing a major boost to the local shipbuilding industry.
Premier Jay Weatherill said the submarines win was a massive step forward in the transformation of the struggling state economy.
"DCNS may have won this contract, but the whole of South Australia is the winner," he told reporters.
"This is a real opportunity to deepen our international relationship with France, with their high-tech manufacturing capabilities, and bring them to South Australia.
"We are on the international map now for France. It is up to us to grasp this opportunity."
Opposition Leader Steven Marshall said the decision cemented Adelaide as the shipbuilding capital of Australia.
"Today's subs announcement is fantastic news for South Australia given that we are facing a number of economic challenges and have the highest unemployment rate in the nation," he said.
"South Australia's ASC shipyards will now have a continuous build, securing thousands of jobs and creating many more, and pumping billions of dollars into the South Australian economy."
Industry figures believe hundreds of shipbuilding jobs may still be lost in SA as work on the Air Warfare Destroyer project comes to an end in 2018.
The subsequent offshore patrol vessels build is likely to be far less labour-intensive, employing about 500 workers compared to 1200 on the AWD project.
But the number of workers at ASC's Osborne shipyard is likely to bounce back strongly when the submarines build commences in the early 2020s.
Australian Made Defence campaign spokesman Chris Burns said the pipeline of work at ASC would also create opportunities for other industries.
"If you're in the construction business, you're also going to reap the benefits of this because there has to be significant investment in growth and infrastructure," he told reporters.
"We have to generate engineers, technicians, tradesmen.
"We have to start from tomorrow working with those contenders for these projects to understand their requirements and to start developing that workforce and that infrastructure."
The project could also provide opportunities for workers in Whyalla, who face an uncertain future with steel and mining group Arrium in administration.
The federal government has promised that Australian steel will be used where possible in the submarine build.
"This news will be music to the ears of the people of Whyalla," Mr Weatherill said.
"We're a long way from declaring victory with Arrium, but this helps."
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