Prime Minister Tony Abbott wants urgent action to address the significant delays and cost overruns that are hampering major naval shipbuilding projects.
The government is set to sack its own naval shipbuilder, ASC, and install British defence giant BAE Industries to rescue the $8.5 billion construction of three air warfare destroyers.
Mr Abbott says the project must be completed as quickly as possible with as few cost overruns and delays as possible.
"We have got to tackle that urgently and that is what the government is in the process of doing," he told reporters in Sydney on Wednesday.
The prime minister said the country needed a strong and viable naval shipbuilding industry that built world-class ships.
The ASC will be limited to maintaining the Collins Class submarines rather than building new warships, The Australian has reported.
Labor frontbencher Jason Clare says the move forms part of a report the government is keeping secret.
The report should be released to allow for a proper discussion about the state of the program, he said.
The "stop-start" nature of building warships in Australia meant there would be problems in construction, Mr Clare said.
"You're not going to be as efficient or as productive as you can be," he told Sky News, adding a continuous shipbuilding program was needed.
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