Australia has announced it will begin building its own guided missiles in close collaboration with the US as it seeks to boost its defence capabilities.

Citing the “changing global environment”, Prime Minister Scott Morrison said it would partner with a weapons manufacturer to build the missiles in a plan that would create thousands of jobs as well as export opportunities.

Mr Morrison said his country would spend one billion Australian dollars (£553 million) on the plan as part of a huge 10-year investment in defence and the defence industry.

“Creating our own sovereign capability on Australian soil is essential to keep Australians safe,” Mr Morrison said.

Australia is part of the “Five Eyes” intelligence alliance, along with the US, Canada, Britain and New Zealand.

“We will work closely with the United States on this important initiative to ensure that we understand how our enterprise can best support both Australia’s needs and the growing needs of our most important military partner,” Defence Minister Peter Dutton said.

He said building weapons in Australia would not only enhance its capabilities but would also ensure the nation had sufficient arms for combat operations if there was any disruption to global supply chains.

The Australian Strategic Policy Institute, an independent think tank, has estimated Australia will spend 100 billion Australian dollars (£55.4 billion) over the next 20 years on buying missiles and guided weapons.