WASHINGTON — U.S., British and Australian leaders are slated to kick off Monday a decades-long project aimed at fielding what would eventually amount to a joint fleet of nuclear-powered submarines suitable for checking China’s military clout in the Asia-Pacific region.

The announcement in San Diego by U.S. President Joe Biden, U.K. Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese has been 18 months in the making. Biden and his counterparts’ respective predecessors said in September 2021 they would form an alliance around equipping the Royal Australian Navy with secretive naval nuclear propulsion technology, naming the endeavor after the three countries’ initials: AUKUS.

Senior administration officials, who briefed reporters ahead of the announcement on the condition of anonymity, detailed the broad outlines of the arrangement. In a first phase, U.S. officials will help Australia build the capacity to maintain and employ nuclear-powered submarines, namely American Virginia-class and British Astute-class boats that will begin operating out of Perth, in southeastern Australia, in 2027.

In a second phase, in the 2030s, Australia will buy at least three and as many as five Virginia-class boats of its own from the U.S. Navy, either newly built or used. The exact number will depend on the progress in the third and final phase, which envisions Canberra to build a new nuclear-powered submarine type in the 2040s based on a nascent design of the follow-on submarine for the Astute.

U.S. officials have emphasized that while the design is British, the eventual submarine, dubbed SSN-AUKUS, would still be stacked with American tech.

The mega-project seeks to overcome Australia’s lack of exposure to the secrets of nuclear propulsion through billions of dollars invested by all three participants. A U.S. shipbuilding budget line newly added last year is set to grow to $4.6 billion this year. The funds are meant to patch industry capacity shortfalls now and pave the way for increased AUKUS production levels later.

“Those are down-payments on what needs to be done for the U.S. submarine industrial base,” the administration official said, adding the White House would “work with Congress to get very substantial lifts in the U.S. submarine industrial base — lifts that go significantly beyond the $4.6 billion we will have submitted with the president’s budget submission.”

Australia, in turn, will make a “proportional and appropriate,” contribution, said the official without giving on a dollar amount. The British on Monday announced a £3 billion ($3.6 billion) boost for nuclear submarine spending, some of which will go, directly or indirectly, to AUKUS.

Submarines powered by atomic reactors can stay on mission longer, travel farther and maneuver more quickly than those running on diesel generators or fuel cells — key benefits, in the eyes of AUKUS proponents, for securing stability in the Asia-Pacific amid Chinese military flexing.

Canberra eventually wants to replace its conventionally-powered Collins-class boats with nuclear submarines. Australia’s original plan before AUKUS was to buy 12 conventional submarines from France’s Naval Group, and nixing that deal in favor of the nuclear pact with the United States and Britain caused a major diplomatic uproar with Paris in 2021 that has since mostly abated.

U.S. military analysts say stealthy attack submarines would play a pivotal role in any conflict with China or another adversary, and the Navy has doubled down on its undersea advantage, making investments to increase the lethality of its submarines and the fleet’s ability to detect enemy subs.

But the major weakness has been capacity. Industry has not been able to achieve and maintain a two-a-year production rate for the Navy, and the COVID-19 pandemic and subsequent changes in the labor market have only further challenged submarine builders General Dynamics’ Electric Boat and HII’s Newport News Shipbuilding and their thousands of suppliers. The Navy would need to buy at least three submarines a year to achieve its own planned fleet size, but that has not been realistic based on industry’s recent performance.

Analysts point to shipbuilding capacity as the key bottleneck for AUKUS. “The aim seems to be to increase the number of boats in or, rather, under the water, but there’s an open question as to the production capacity of our and really all three nations’ shipyards,” said Charles Edel, a former State Department official now at the Washington-based Center for Strategic and International Studies think tank. “Again, the ambition is to expand shipbuilding here. The question is how quickly this can be accomplished.”

Congressional buy-in will be crucial to get AUKUS on track, both for approving new shipbuilding money and for allowing in-service U.S. Navy Virginia-class boats to be sold to Australia as an interim capability. For now, White House officials said they came away optimistic from briefings in recent weeks.

While Congress would not have to act on any Virginia-class sales until the 2030s, when Australia wants the submarines, U.S. officials said doing so earlier would give Canberra peace of mind.

“There are advantages to make it clear to the Australians and to the world that the United States is committed,” said the administration official.

Also high on the to-do list for AUKUS is a refresh of U.S. policies that allow for sharing sensitive nuclear-propulsion technology. While an initial defense agreement with Australia to that end has been in effect since February 2022, officials plan to negotiate a new text with a wider scope.

Joe Gould in Washington contributed to this report.

Sebastian Sprenger is associate editor for Europe at Defense News, reporting on the state of the defense market in the region, and on U.S.-Europe cooperation and multi-national investments in defense and global security. Previously he served as managing editor for Defense News. He is based in Cologne, Germany.

Megan Eckstein is the naval warfare reporter at Defense News. She has covered military news since 2009, with a focus on U.S. Navy and Marine Corps operations, acquisition programs and budgets. She has reported from four geographic fleets and is happiest when she’s filing stories from a ship. Megan is a University of Maryland alumna.

Bryant Harris is the Congress reporter for Defense News. He has covered U.S. foreign policy, national security, international affairs and politics in Washington since 2014. He has also written for Foreign Policy, Al-Monitor, Al Jazeera English and IPS News.

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