The United States, United Kingdom and Australia entered into a partnership to build nuclear submarines in Adelaide.
The announcement was made Wednesday by the leaders of the three countries.
President Joe Biden said the partnership will allow the countries to take on the threats of the 21st century.
"I want to be exceedingly clear about this. We're not talking about nuclear-armed submarines. These are conventionally-armed submarines powered by nuclear reactors," Biden said.
Biden said the partnership is necessary to secure a "free and open Indo-Pacific."
"Today we take another historic step to deepen and formalize cooperation among all three of our nations. Because we all recognize the imperative of ensuring peace and stability in the Indo-Pacific over the long term," Australian Prime Minister Scott Morrison said.
In addition to the fleet of submarines, British Prime Minister Boris Johnson said the partnership will allow the countries to share vital security information.
"The UK, Australia and the U.S. will be joined even more closely together," Johnson said.
Politico reports that the move is a counter to China in the Indo-Pacific.