MELBOURNE — Australia will invest $3.9 billion Australian dollars ($2.75 billion) in a submarine construction yard at Osborne in South Australia, to build nuclear-powered submarines acquired under the AUKUS pact, according to Prime Minister Anthony Albanese.

The money, announced Sunday, will serve as a down payment for the construction of the yard. Government-owned Australian Naval Infrastructure, which is responsible for the infrastructure behind Australia’s continuous naval shipbuilding program — including modernization of the Osborne yard — projects building the facility to cost $30 billion Australian dollars.

“South Australia is at the centre of one of the most significant defence undertakings in our history,” Premier of South Australia Peter Malinauskas said in a press release. “Osborne will be critical to Australia’s nuclear-powered submarine program under AUKUS, while supporting continuous naval shipbuilding and sustainment.”

When completed, the yard will comprise three main areas for fabrication, outfitting, and an area for consolidation, testing, launching and commission, according to the press release from Albanese’s office.

The total floor area of the new facility is expected to be 10 times larger than the existing submarine yard at Osborne South, and is expected to use 126,000 tons of structural steel — with the fabrication hall alone measuring 420 meters (1,378 feet) long, the statement added.

Albanese made the announcement during a visit to the site of the future facility with Malinauskas and Australia’s Minister for Defence Industry Pat Conroy. He reiterated that the pact was in the interests of AUKUS partners the US and United Kingdom, and said that his government was accelerating AUKUS opportunities to secure Australia’s future defense capability.

“The transformation underway at Osborne shows Australia is on track to deliver the sovereign capability to build our nuclear-powered submarines for decades to come,” Albanese said.

Conroy called the submarine construction yard a massive boost to a significant industry in Australia, and highlighted its uniqueness.

“When this shipyard is constructed and when it’s finished, it will be the only shipyard in the Southern Hemisphere capable of constructing nuclear-powered submarines,” he noted in a press conference during the visit.

Under the AUKUS pact, Australia will acquire up to five US Virginia-class submarines in the 2030s as it transitions to a nuclear-powered submarine force before building five SSN-AUKUS submarines beginning in the 2040s.

The new class of submarines will also be used by the UK’s Royal Navy, which has announced plans to build and operate a further 12 boats., up from the seven Astute-class submarines currently in service.