Contract signed for Pacific data cables

Australia will spend $136 million to build new undersea data cables to Papua New Guinea and the Solomon Islands.

Telecommunications company Vocus has signed the deal to build the Coral Sea cable system, which Australia is funding after concerns over Chinese firm Huawei's involvement in the project.

"Boosting connectivity in PNG and Solomon Islands will drive economic growth and improve governance and security," Foreign Minister Julie Bishop said on Tuesday.

"Australia will deliver and majority-fund the cables, with a financial co-contribution from both PNG and Solomon Islands."

World Bank research estimates better internet access could grow GDP by more than $US5 billion and create close to 300,000 new jobs in the Pacific by 2040.

The cable project is due to be completed by the end of 2019.

Australia stepped in to fund the cables after concerns about giving Huawei access to Australia's mainline communications backbone.

The Chinese firm has rejected suggestions it poses a security threat.