The Federal Government has announced a $1.1 billion upgrade to the Northern Territory's RAAF Base Tindal in a bid to expand Australia and the United States' air force capabilities into the Indo-Pacific.

Key points: The upgrade to the base outside Katherine in the Northern Territory will cost $1.1 billion

The upgrade to the base outside Katherine in the Northern Territory will cost $1.1 billion Some of Australia's new F-35 joint strike fighters will be based at RAAF Tindal

Some of Australia's new F-35 joint strike fighters will be based at RAAF Tindal The air base will also help the US Air Force launch missions into the Indo-Pacific

The base outside Katherine will be home to a number of the Royal Australian Air Force's (RAAF) 72 new F-35 joint strike fighter jets, and the expansion project is slated to be finished by the end of 2027.

Most of the money, $737 million, will be spent on extending the runway and building new fuel storage facilities so that the base can deal with larger aircraft, including US long-range bombers and Australian refuelling aircraft.

"It will be integral to our alliance with the United States, and [will] increase the reach of Air Force capabilities in the Indo-Pacific," Prime Minister Scott Morrison said in a statement.

"As part of these upgrades, RAAF Base Tindal will be able to deliver enhanced air-to-air refuelling and air support capabilities, ensuring we can support critical ADF operations — everything from air combat missions through to responding to natural disasters both at home and throughout our region."

RAAF Base Tindal is regarded as one of the nation's most strategically important defence precincts and first opened in the 1940s.

The latest announcement is indicative of the Federal Government and the Department of Defence's push to develop its capabilities in the north of Australia, given its renewed focus on the Indo-Pacific.

All eyes are on China, which continues to expand its strategic footprint in areas such as the South China Sea.

Planning is underway for a new port facility to be built near Darwin, which could eventually help US Marines operate more readily in the region.

The Northern Territory has hosted contingents of US Marines since 2012 after then-US president Barack Obama and former Australian prime minister Julia Gillard signed off on a plan for Australian and US personnel to increase joint training exercises.

Close to $500 million has already been spent at the base, readying it for the arrival of the joint strike fighter aircraft.