Australia announced Tuesday a $4.7 billion deal to arm its navy with cutting-edge US medium and long-range missiles at a time of rapidly escalating military tensions in the Asia-Pacific.

The agreement, hailed by Canberra as a "significant milestone", retools Australia's naval defences in line with a new strategy unveiled this year to deter China's "coercive tactics" in the region.

Australia said it would spend Aus$7 billion (US$4.7 billion) to acquire the ship-borne SM-6 missile, which can strike aircraft and cruise missiles, and the medium-range SM-2 Block III C missile boasting new guidance and homing capabilities.

"Australia faces the most complex geo-strategic environment since the Second World War," said Australia's minister for defence industry, Pat Conroy, who was visiting Washington.

The "world-leading" missiles would "keep Australians safe, deter any adversary, and defend Australia's national interests in the missile age", he said.

The missiles are to be progressively deployed across Australia's three Hobart class destroyers and later the country's planned Hunter class anti-submarine frigates, the government said.

In April, Australia unveiled a defence strategy that envisaged a sharp rise in defence spending to counter its vulnerability to foes interrupting trade or preventing access to vital air and sea routes.

Besides rapidly developing its surface fleet, Australia plans to deploy stealthy nuclear-powered submarines in a tripartite agreement with the United States and Britain known as AUKUS.

The new US missiles demonstrate the Australian Defence Force (ADF) intention to enhance the "lethality" of its navy, Defence Minister Richard Marles said.

They "will enable our Navy to strike maritime, land and air targets at long-range, and provide a terminal ballistic missile defence capability, boosting the capacity for the ADF to safeguard Australians and their interests", he said.