Canberra has chosen US defence contractor Lockheed Martin to provide the combat systems for its new fleet of 12 French-designed submarines, it was reported Friday.

The Australian arm of the American defence giant defeated US rival Raytheon to win the contract to fit out the Aus$50 billion (US$38 billion) vessels.

The contract will cover systems including sonar and torpedoes, Australian media said.

"By partnering with an Australian-based company with strong links to the US, we will ensure that we get the best Australian and US technology, while ensuring that our sensitive technology is protected," Defence Minister Marise Payne and Defence Industry Minister Christopher Pyne said in a statement, according to The Australian newspaper.

Australia awarded French contractor DCNS the contract last April to design and build its next generation of submarines.

The submarines are a scaled-down conventionally powered version of France's 4,700-tonne Barracuda.

The combat systems will be fitted to the submarines in Adelaide in partnership with Australia's Department of Defence and DCNS, The Australian added.

France's Minister of Defence, Jean-Yves Le Drian, and the boss of DCNS both welcomed the decision by Canberra.

Herve Guillou, DCNS CEO, said: "DCNS is looking forward to a strategic and sustainable partnership with the Commonwealth of Australia, Lockheed Martin and Australian industry."

He added: "DCNS is committed to ensuring that Australia has a regionally superior submarine constructed in Adelaide and develops a sovereign naval industry."