The OneSKY program will cover 11 per cent of the world's airspace, and integrate defence and civilian air traffic for the first time anywhere on the globe.
Airservices Australia chairman Angus Houston said the $600 million project was the most advanced in the world.
"We're very excited about what we're about to do, which is quite unique across the world," Sir Angus told reporters on Friday.
The former defence chief said air traffic controllers would be able to predict plane trajectories in real time, allowing them to co-ordinate flights better and reduce delays.
Acting Prime Minister Warren Truss said the new system would not necessarily prevent incidents such as the disappearance of Malaysia Airlines flight MH370, but it would improve surveillance of planes.
"It will place us in a position to manage forecast growth of air traffic movement in Australia, of as much as 60 per cent by 2030, minimising delays for the travelling public," Mr Truss said.
Thales Australia won the bid to build OneSKY, which will create 400 jobs and has scope for 100 more. Airservices Australia chief executive Margaret Staib said the rollout would begin in 2018 and is due to be completed in 2021.
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