The Australian government said it wants boats to be either an evolved Collins class vessels or a new submarine designed and built at Techport in Adelaide.
The government reached its decision about expanding the Australian navy's submarine fleet after a $214 million future options study outlined four options, which will be whittled down to two next year.
The current class of Collins boats has exhibited problems such as excessive noise, mechanical and combat systems problems. Defense officials have orders a major land-based "test bed" facility to be constructed in Adelaide to evaluate crucial aspects of the submarines, including propulsion systems, before they are launched, The Herald Sun reported.
The projected 12 submarines will cost more than $30 billion and will represent the country's biggest defense project, creating thousands of jobs and work for hundreds of companies.
It is expected that the boats will be built by the ASC, formerly the Australian Submarine Corp., a government-owned Australian naval defense company based at Osborne in Adelaide, South Australia.