SA defends cost of onshore subs contract

South Australia has poo-pooed arguments the $50 billion or more cost to build the nation's 12 new submarines would have been as much as 30 per cent cheaper if the work was done offshore.

The cost premium to construct the vessels in Adelaide is less than 10 per cent, SA Australian Premier Jay Weatherill said on Wednesday.

"I think using Australian steel, Australian workers and ... having Australian skills and capacity staying here in this country - there's a massive premium in that," he told Nine Network.

The project, which is Australia's biggest defence contract in modern times, has gone to France's DCNS which is due to start work on the new Shortfin Barracuda vessels later this year.

Some 2800 jobs will be created in South Australia and more in other states where some components are expected to be manufactured.

Weighing 4500 tonnes and measuring 97 metres, the subs are substantially bigger than the 3100-tonne, 77-metre ageing Collins class vessels they are replacing.

They feature sophisticated equipment, including a pump jet in place of a noisier conventional propeller.

"Having that $50 billion project based on South Australia is just an enormous confidence boost for our community," Mr Weatherill said.

Negotiations for final terms of the contract between Australia and DCNS are expected to take some months to complete.

DCNS chairman Herve Guillou pointed to the links between France and Australia forged 100 years ago during the great wars.

"We look forward to further strengthening this time honoured relationship and honouring the trust the Australian commonwealth government is placing in us for this ground-breaking project," he said in a statement from Paris.

Mr Weatherill is due to travel to France later this week to visit the DCNS subs facility based in the port city of Cherbourg.