Australia's push for a slice of the rapidly growing space industry will receive a $50 million injection in the federal budget, the ABC can reveal.

Next Tuesday, the Government will unveil "seed funding" to finally establish a dedicated Australian space agency to coordinate existing efforts in the aeronautical industry, with the aim of generating thousands of future jobs.

Most developed nations, including New Zealand, already have a space agency and there are concerns Australia may be not be capitalising on a global industry believed to be worth $420 billion a year.

The Turnbull Government is yet to decide where the new space agency will be located, but the ABC understands Western Australia, South Australia, the Northern Territory and the ACT have all expressed interest in hosting the headquarters.

A senior Coalition source said the Government expected the private sector would contribute "the lion's share" of funding for Australia's space industry.

The ABC has confirmed the budget will also have a focus on improving GPS technology which can be used for mapping, aviation and broad-scale farming projects.

Former CSIRO boss Megan Clark, who has just completed a government review of the space sector, will head the new agency for its first year.

Professor Anna Moore, a member of the expert reference group which contributed to Dr Clark's review, welcomed confirmation of the space industry funding.

"The $50 million injection is a great start for setting up the agency itself," Professor Moore said.

"Australia is at the perfect time to jump in and grab part of this market because it is changing. There is industry here already but it's all at a very low level, there's nothing coming up."

Australian National University astrophysicist Brad Tucker also welcomed the funding.

"We can be putting things into space and we should be," he said.

"We're well placed geographically for communications and for launch sites and we're well placed for creativeness in our people — and that's what you want in a space agency."

Last year, Bank of America Merrill Lynch predicted the space industry would be worth more than $3.5 trillion within three decades.