Australia Friday said it will partner with French industrial giant Thales to develop a "world first" joint civilian-military air traffic control system that could help track MH370-type incidents.
The "OneSky" system will replace Australia's current civilian system which dates from the late 1990s and was also developed by Thales, the government said.
"This programme will make Australia the first country in the world to commission an integrated joint civil-military air traffic management system," Defence Minister Kevin Andrews said.
The combined system will see controllers share flight data and allow for a "seamless flow of national and international air traffic", he added in a statement.
Hailing the new system as a "dream for decades", Infrastructure Minister Warren Truss said it could also help countries respond faster to aerospace incidents such as the disappearance of Malaysian Airlines MH370 last March.
The jet went missing en route from Kuala Lumpur to Beijing with 239 people on board, with a massive air and underwater search failing to find any evidence of the plane.
"This technology... will help us to have better surveillance of aircraft and so we would know about an incident like MH370 more quickly and more precisely," Truss told reporters at the Australian International Airshow at Avalon in Victoria.
"So it would be a substantial advantage in seeking to find the wreckage but it couldn't necessarily prevent it from happening."
The government did not reveal the size of the contract with Thales, but The Australian newspaper estimated implementation costs to be about Aus$600 million (US$470 million).
AirServices Australia and the Department of Defence will work with Thales to implement the system, which will be phased in from 2018 to 2021.
"It will place us in a position to manage forecast growth of air traffic movement in Australia, of as much as 60 percent by 2030, minimising delays for the travelling public," Truss said in an earlier statement.
Thales opened an aviation innovation laboratory in Melbourne in 2011 where it has been developing next-generation civilian and military air traffic control systems.
The "OneSky" project was first announced by the previous Labor administration. Local media has reported previous tensions between the defence department and AirServices Australia over merging air traffic control systems.