Japan, France and Germany will compete to build Australia’s next submarines as the Federal Government continues its search for a potential partner, the Defence Minister says.

Kevin Andrews said the Defence Department would seek proposals from potential partners looking at options to either design and build overseas, in Australia or a hybrid approach through a “competitive evaluation process”.

But there were no guarantees the submarines would be built or designed in Australia.

Mr Andrews ruled out Swedish defence company Saab, which has a presence in Adelaide and had expressed an interest in building the vessels in South Australia.

But the Minister said he expected significant work would be undertaken in Australia, particularly during the build phase leading to the creation of at least 500 new, high-skilled jobs.

He said many of the 500 jobs would be in South Australia and would focus on significant works ranging from combat-system integration to land-based testing.

“The Government expects that significant work will be undertaken in Australia as part of the build phase of the future submarine including, but not necessarily limited to, combat-system integration, design assurance and land-based testing,” Mr Andrews said.

“This will result in the creation of at least 500 new, high-skilled jobs in Australia for the life of the program, the majority of which will be in South Australia.

“So this is good news for Australian industry, it is good news for the Australian economy, it is particularly good news for Australian jobs and can I say to anybody in South Australia who may be listening or watching, this is particularly good news for South Australia.”

South Australian Premier Jay Weatherill said he believed the Government wanted the submarines built in Japan.

He said he was disappointed Sweden had been ruled out of the “competitive evaluation process”.

“It tells you all you need to know about the process,” Mr Weatherill said.

“Sweden say they can build submarines for the right price, on time, here in South Australia, and they get ruled out of the process.”

The Future Submarine Program is the largest Defence procurement program in Australia’s history and represents an investment in the order of $50 billion, the Government said.

Mr Andrews said France, Germany and Japan had proven submarine design and build capabilities, and currently produce submarines.