A massive technological transformation is underway in the Australian Army with the introduction of hundreds of new drones.

Key points: The Army is examining countering enemy drones with armed UAVs

The Army is examining countering enemy drones with armed UAVs Drones are already used by the Army for reconnaissance

Drones are already used by the Army for reconnaissance Concerns have been raised about the psychological impact on drone operators

Soon every combat unit will be operating unmanned aerial systems, but now for the first time the Army is publicly discussing whether the technology should, one day, be fitted with weapons.

"In a modern, evolving, dangerous battlespace where weaponised drones are being used against us, we are exploring those concepts," says Lieutenant Colonel Keirin Joyce, the Army's head of Unmanned Aerial Systems.

During the war against Islamic State, Australian Special Forces soldiers reported seeing the enemy using cheap, commercial drones armed with small explosives such as grenades.

One senior officer who took part in Australia's "advise and assist" mission in Iraq says that in 2016 Coalition forces began to notice Islamic State flying two drones in tandem over the battlefield.

Sorry, this video has expired ABC footage shows the downing of an Islamic State drone by Kurdish troops in 2016.

"The first UAV (Unmanned Aerial Vehicle) would deliver the explosive and the second would follow closely to film the attack for ISIS propaganda purposes," the unnamed officer told the ABC.

Lieutenant Colonel Joyce said the Australian Army was now closely examining methods for countering armed drones, including options for possibly acquiring its own lethal UAVs.

"We're working tightly with industry, academia, Defence Science and Technology Group and our Coalition partners to define what those requirements are and define plans for how we might bring those into service but as yet we don't have a program or project for weaponised drones."

Already Defence has announced plans for the Royal Australian Air Force to soon acquire longer-range armed drones which have been controversially used by the US military for decades.

A US Marine prepares to launch a drone in Central Queensland as part of Exercise Talisman Saber. ( Australian Defence Force )

However, Australian National University academic Adam Henschke warns that some recent research shows remote pilots of armed drones often suffer psychological damage.

"One of the interesting ethical issues that comes up in the use of drones is the moral injury to the pilots," Dr Henschke told the Saturday AM program.

"In the past few years there's been some interesting statistics coming out that the pilots of the drones even if, and sometimes especially if they're located in other countries or at home, they can suffer psychological trauma."

But well before the Australian Army looks at acquiring killer drones, Lieutenant Colonel Joyce says unmanned systems are already saving soldiers' lives in combat.

"Instead of sending a soldier down into an intersection or into a creekline, or over a hill for that first look, we don't have to do that anymore," Lieutenant Colonel Joyce says.

"With the range of capabilities that we've got we simply fly our set of robot eyes to go have a look first, so we remove those soldiers from harm".