The defence force's ability to operate out of northern Australia will be boosted with improvements to air force bases and barracks.
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The government is putting aside $3.8 billion for upgrades across Queensland, the Northern Territory and Western Australia.
RAAF Learmonth on the WA coast, Scherger and Townsville in Queensland and other bases across the NT and Cocos Islands will share $2 billion to improve runways, fuel storage and supply, accommodation and security.
A further $1 billion will go towards upgrading training areas in the NT, as well as barracks in Darwin and Townsville.
Maritime bases in Coonawarra, NT and Cairns in Queensland will be given a share of $600 million while another $200 million will be used to accelerate additional projects across Australia's north.
The money is coming from a combination of reallocated defence budget spending and the cancellation of other programs.
Defence Minister Richard Marles said the boost would mean a greater defence footprint in the area.
"We will be seeing the numbers of personnel in the north and specifically in Darwin growing over the next 10 years ... there is some moving around but in aggregate you will see numbers grow," he told reporters on Thursday.
"What you're also going to see is a continual growth of the marine rotation that's happening here and a greater opportunities to involve other countries in training opportunities."
Mr Marles said other countries had expressed interest in taking part in military exercises in the area during the rotation of US marines in Darwin.
The announcement comes days after a major review recommended the defence force improve its ability to operate out of northern Australia.
"That goes very much to the thrust of what the defence strategic review is articulating in looking to have a greater physical investment in our north but a human investment as well," Mr Marles said.
"All of that equals greater defence activity in the north and here in Darwin and all that is good news for the territory's economy."
The review also recommended Australia focus more on long-range strike power, such as guided missiles.
The government subsequently announced it would embark on a cut-back in infantry fighting vehicles from 450 to 129 and cancel 30 new howitzer artillery systems.
It will instead focus on missiles, and artillery and landing craft to transport Australian power.
South Korean defence company Hanwha is working with the government on both contracts and said it was disappointed at the changes.
"We are awaiting further guidance from the Commonwealth on the path ahead for this project," a company representative said.
"Hanwha Defence Australia will continue working with our partners on both projects."
Hanwha said there was no change to the initial contract for 30 self-propelled howitzers, only the second phase.
Australian Associated Press
