In what the Government says is a world first, Australia's next air traffic management system will service both civilian and military aircraft, doing away with long-standing separation.

The Royal Australian Air Force (RAAF) previously resisted the move, arguing it was imperative Defence retained full control over military flight traffic.

But the RAAF's concerns were outweighed by the prospect of major savings and what the Government described as a "once-in-a-generation" opportunity to renew both systems at the same time.

It is expected the move will save several hundred million dollars.

Later today the Government will announce a deal which will see defence contractor Thales partner with the Department of Defence and Australia's civilian air traffic control authority, Airservices Australia.

The Government said the initiative would also allow controllers to safely handle a major increase in the number of planes flying in the coming years.

"It will place us in a position to manage forecast growth of air traffic movement in Australia, of as much as 60 per cent by 2030," Infrastructure Minister Warren Truss will say.

Defence Minister Kevin Andrews will support the move.

"This will deliver safety and efficiency benefits, through shared access to common flight data," he will say.

The current system, introduced in the late 1990s, will be phased out over three years from 2018.