Australia will spend $966 million to boost maritime surveillance of its northern approaches, buying more long-range drone aircraft and upgrading Poseidon maritime patrol aircraft.

The fleet of 14 Boeing P-8A Poseidon Maritime Patrol aircraft will have anti-submarine warfare, maritime strike and intelligence collection capabilities upgraded, Minister for Defence Industry Pat Conroy said in a statement on Tuesday.

​A fourth Northrop Grumman manufactured MQ-4C Triton drone aircraft, developed with the United States Navy, will be based in Australia's Northern Territory, closest to Asia, and operated by a newly formed squadron in South Australia state.

The Triton will provide long-range surveillance of Australia's maritime region, the statement said.

"The purchase of an additional Triton will enhance operations from Australia's northern bases, a priority under the Defence Strategic Review," said Conroy.

'Potential for conflict'

The review in April said the United States was no longer the "unipolar leader of the Indo-Pacific", that intense competition between the US and China was defining the region, and that the major power competition had "potential for conflict".

It recommended the country's northern bases become a focal point for deterring adversaries, and protecting trade routes and communications.

Australian Poseidon aircraft have conducted patrols in the South China Sea, and have also operated out of a Japanese airbase to enforce United Nations Security Council sanctions on North Korea.

Conroy said the Poseidon aircraft upgrades will strengthen the protection of Australian "maritime interests".