Britain's defence secretary Wednesday made a strong push to build Australia's next fleet of warships, saying the frigates he proposes are best placed to hunt "Russian and Chinese submarines" amid regional tensions.

Australia earlier this year detailed a massive Aus$89 billion (US$70.4 billion) shipbuilding strategy, including constructing new submarines and frigates, in the nation's largest peacetime naval investment.

The big increase in defence spending comes as Beijing flexes its muscle in the region through a military build-up in the contested South China Sea, and as tensions remain high on the Korean peninsula.

Defence Secretary Michael Fallon made the pitch to build the nine frigates as part of a Aus$35 billion project ahead of annual Australia-Britain defence and foreign minister talks in Sydney this week.

Three designers are vying for the massive contract -- Britain's BAE Systems, Italy's Fincantieri and Spain's Navantia -- which is described by Canberra as currently the world's largest frigate shipbuilding programme of its kind.

"You need in a region that is now as unstable and tense as it is, as you've decided, some anti-submarine hunting capability and the very latest capability," Fallon told The Sydney Morning Herald.

He said the Type 26 Frigate -- a class currently being constructed for the British navy -- would be better than their Italian and Spanish rivals in hunting "Russian and Chinese submarines" in waters around Australia and the Pacific.

"The quietness of the ship, and the sophistication of the technology on it, puts it way ahead of any European offer you might be considering," said Fallon.

A key element of the contract is that there must be a high-level of local construction, in a bid by Canberra to boost domestic jobs in the shipbuilding industry.

Fallon said the use of local manufacturing was "perfectly reasonable", and added that Britain would be open to buying Australian-made military equipment.

The programme will replace Australia's current ANZAC class frigates with the winning designer due to be announced next year and the first warship expected in service by the late 2020s.

French naval contractor DCNS was last year selected to design and build 12 new Australian submarines at a cost of Aus$50 billion at an Adelaide yard, beating off competition from Japan and Germany.

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