France's Prime Minister Manuel Valls will make a surprise visit to Australia on Monday for talks with Malcolm Turnbull, after a French shipbuilder won a huge submarine contract.

Contractor DCNS beat off competition from Japan and Germany to seal the $50 billion deal to design and construct 12 new conventionally-powered submarines.

The submarines will be a smaller version of France's 4,700-tonne Barracuda, replacing Australia's ageing diesel and electric-powered Collins Class submarines.

Mr Turnbull has stressed the 12 submarines would be built in Adelaide and has said the project would create 2,800 Australian jobs.

Mr Valls has been in the French Pacific territory of New Caledonia for discussions about an independence referendum which must be held before 2018.

He travelled to New Zealand on Sunday, with officials in his delegation confirming he will detour to Australia on Monday.

As well as seeing Mr Turnbull, he is expected to meet members of the DCNS team that put together the successful bid.

French President Francois Hollande hailed the decision as historic last week.

"It marks a decisive advance in the strategic partnership between the two countries who will cooperate over 50 years," his office said in a statement.

France has a long history of building submarines for export, and analysts said it was the most capable contender.

Japan and Germany submitted unsuccessful bids for the contract.

Tokyo expressed disappointment in the Federal Government's decision and requested an explanation, while German bidder Thyssenkrupp Marine Systems said it respected the decision.

"We are naturally disappointed but we stand ready to provide support for Australia's future submarines project with our unrivalled experience, leading technology and track record in building submarines in the customer's own country," the company's Australian chairman John White said in a statement.

ABC/AFP