Almost $5 million in funding has been given to an early planning program for the development of Australia's next generation of submarine.

Defence Minister Joel Fitzgibbon announced plans for the $4.67 million study into what Australia's submarines could look like in 2025.

"Submarines provide a vital military capability for Australia. A key Defence election commitment for this Government is focused on carefully planning for Australia's next generation of submarine," he said.

"I am therefore pleased to announce that I have recently approved funding of $4.67 million for a program of studies in support of the acquisition of Australia's future submarines."

The study will be managed by a project office operating under the joint supervision of Capability Development Group and the Defence Materiel Organisation.

Mr Fitzgibbon says that 17 people will manage the Future Submarine Project, designated SEA 1000, with plans for the project to expand over the years.

"Through these studies, Defence will engage industry to assist development of the project acquisition strategy for Government consideration in the second half of 2009," he said.

"Work on the concept design of the future submarine will commence in 2010, leading to further consideration by Government in 2011.

"This is yet another demonstration that this Government is committed to ensuring that Australia's future Defence capabilities are carefully considered and well-planned."

The future submarine is expected to enter service around 2025 when the Navy's Collins Class submarines will begin to be withdrawn from service.