Govt signs $2bn frigate maintenance deal

The federal government has signed a deal to keep the navy's eight Anzac frigates sailing until they retire.

Under the open-ended contract worth $2 billion for the first eight years, BAE Systems, Saab Australia and the Commonwealth will perform frigate sustainment work at Henderson, Western Australia and Fleet Base East in Sydney.

Defence Minister Marise Payne says it will ensure the Anzac frigates remain a potent capability until new Future Frigates, which start construction in Adelaide in 2020, enter service.