Defence Minister Joel Fitzgibbon says he is alarmed by reports that thousands of Royal Australian Navy sailors could have been exposed to cancer-causing asbestos.

A risk assessment report prepared by a Defence contractor has found thousands of sailors could have been exposed to chrysotile asbestos in spare parts held in naval stores.

The use and importation of asbestos-containing materials was made illegal in Australia in 2001, but the Navy has been granted several waivers and exemptions.

Mr Fitzgibbon says that is coming to an end.

"I'm alarmed by the report. I'm alarmed by what I've been seeing in terms of the culture within Defence since I came to Government a year ago," he said.

"I've told Defence that we will not stand for it and I expect the problem to be fixed, notwithstanding the fact that it's likely to cost Defence a lot of money."

Mr Fitzgibbon says the Navy has until next year to eradicate the parts which contain asbestos.