The Government has announced it is spending $18.5 million on what has been hailed as Australia's newest national security weapon – facial recognition technology.

The Capability - short for The National Facial Biometric Matching Capability - will allow law enforcement and security agencies to quickly scan through up to 100 million facial images held in databases around Australia.

The images can come from drivers' licences, passport photos or security cameras in your local shopping centre, and the technology works because your face is unique, like your fingerprints.

Justice Minister Michael Keenan said The Capability had been informed by independent privacy assessments and will help combat identity fraud and theft as well as terrorism and organised crime.

"It keeps Australians safe by protecting their identity and it allows our law enforcement authorities to accurately and efficiently to identify someone who might take their interest," he said.

But privacy advocates said people should always be asked or at least notified before their faces are scanned, which under law, can happen from a distance without a person's knowledge.

"This is a whole other league of creepy, this is a whole other league of invasive and the fact that there's been no discussion around this is really weird," cyber security analyst Patrick Gray said.

How The Capability works - The software identifies your most unique facial characteristics in what is known as a 'face print'. - It measures the attributes within the eyes and nose region of a person's face and matches that with various databases of known individuals. - The system will ultimately cover every Australian citizen with a passport or drivers' licence and can hold multiple photos of a single person.

"My concern is that because there's no restriction on the way law enforcement can use this, it's going to become a staple tool for law enforcement eventually."

The Government's facial matching system will not use live CCTV feeds but it will use stills, which experts warn are not foolproof.

"I think we need to be concerned about the potential error rate of the technology," Deakin University criminology expert Adam Molnar said.

"The FBI accepts a 20 per cent inaccuracy so that's one in five images that could be false identification of an individual."

Mr Molnar said the technology is notoriously problematic in uncontrolled environments with bad angles, which raises concerns about how false positives could unnecessarily impact on someone's life.

How police use facial recognition

Mr Keenan said initially, the Australian Federal Police, DFAT and the Immigration Department would be the "primary users" of The Capability.

"But if other people have a lawful use for this technology then we could look at them accessing this information over time," he said.

Lateline asked various state and federal police about their use of facial recognition.

Victoria police said it had a database of 1.4 million facial images while Queensland police identified 3.7 million images of faces, tattoos and artist drawings.

The Northern Territory, with its population of 240,000, already has 100,000 facial images in its police data base.

The Top End police are also using mobile CCTV and tablets and are trialling body cameras to work with facial recognition.

NSW, South Australia and Western Australia police did not answer Lateline's questions.