The joint air battle management system is the second tranche of what is expected to be a multi-billion dollar program.
Lockheed Martin Australia has been chosen to deliver the project, which is expected to create 230 jobs in areas such as software development, systems engineering, project management and logistics.
There will be about 150 jobs in South Australia and 60 in the NSW Hunter region while the rest will be spread across Brisbane and Canberra.
The military's medium-range ground air defence capability is also being accelerated as the government considers development options with several companies.
Defence Minister Richard Marles said the government was working to ensure the defence force was equipped with modern capabilities.
"These capabilities are essential in our pursuit of preserving and protecting our sovereignty and security, while also promoting stability in our region," he said.
Defence Industry Minister Pat Conroy said it was an opportunity for Australian manufacturing.
"I'm pleased to say (this) announcement will create a significant number of high-skilled secure defence industry jobs, boosting the local economy," he said.
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