A factory in Sydney will help give the Australian navy an underwater edge as it prepares to build dozens of autonomous submarine drones.

Defence Industry Minister Pat Conroy joined Chief of Navy Mark Hammond for the launch of US defence company Anduril's factory, where they will make the underwater drones also known as Ghost Sharks.

The Albanese government announced in September it will acquire an unspecified number of the undersea drones at a cost of $1.7 billion from Anduril.

The unmanned craft are capable of intelligence, surveillance and reconnaissance and are described as bolstering the navy's capability.

Mr Conroy said the factory was a "shining example" of what could be achieved when decision-making and procurement processes were right.

"Ghost Shark is an exemplar of how the go

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