Italian shipbuilding company Fincantieri will build sections of cruise ships in South Australia.
The company has already been shortlisted to build nine frigates in Adelaide under the navy's $35 billion future frigate program.
The new frigates will replace the current Anzac frigates, and construction is expected to create around 2000 jobs when it begins in 2020 at Adelaide's Osborne shipyard.
Building the cruise ship sections locally will allow the company to gain familiarity and trust with local suppliers before the start of possible construction on the frigates, Fincantieri chairman Dario Deste says.
"With the strength of Australian steel and a local workforce, we are not only bringing suppliers into our expansive network but giving them the opportunity to become competitive in a global marketplace," Mr Deste said.
Four Australian companies have also been invited to bid for work with Fincantieri, SC Shipbuilding, Adelaide Ship Construction International, MG Engineering and Ottoway Engineering.
Once built, the block will be transported to Asia for full construction into cruise ships.