Australia's special forces will sport new weapons and body armour as part of a $3 billion spend on new equipment and training over the next two decades.

Key points: New weapons, body armour and parachuting equipment will be coming for special forces soldiers

New weapons, body armour and parachuting equipment will be coming for special forces soldiers The Opposition welcomed the investment in the Australian Defence Force

The Opposition welcomed the investment in the Australian Defence Force The Government says it's the greatest peacetime investment in the Defence Force

Standing alongside military equipment, Prime Minister Scott Morrison said Australia's elite soldiers needed to be safe in battlefields so they could keep Australians safe.

"This is about ensuring our special forces are on the leading edge of capability," he said.

"The threats are always there and the challenges are always there and we must always be prepared to face them — not just now but for the next 20 years."

The first stage of the program, dubbed Project Greyfin, includes $500 million in the next four years to boost equipment spending on Australia's eight special forces units.

The money will fund equipment including weapons, body armour, parachuting and climbing systems, along with high-performance training during the next four years.

"This is one of the most important investments that I can make as a prime minister to ensure that our special forces are equipped to do the job that we require of them to protect Australia and keep Australians safe," Mr Morrison said.

Last month, a leading defence analyst warned Australia needed to rapidly increase military spending.

Professor Hugh White from the Australian National University called for a doubling of submarine and fighter aircraft spending, arguing the United States was no longer a reliable ally.

Defence Minister Linda Reynolds said the project would be the biggest Government investment in the Defence Force in decades.

"Our special forces, now more than ever, need to be ready and able to deploy on operations anywhere in the world, at short notice, and in very uncertain conditions," she said in a statement.

"This first stage of funding enables our special forces to engage with intelligence, science and technology and innovation organisations to ensure future threats and opportunities are assessed, to make sure we are delivering them the capability they need in the future."

The Government expects to spend 2 per cent of gross domestic product (GDP) on Defence by 2020-21.

"Labor welcomes greater investment in the Australian Defence Force and its personnel and looks forward to seeing further detail of this announcement," the Opposition said in a statement.

Equipment upgrade as PM considers deployment

The new equipment funding comes as Mr Morrison and his Defence chiefs consider joining the United States and Britain in the Persian Gulf.

The US has requested Australia join its effort to protect oil shipments against Iranian interference in the Strait of Hormuz.

The US has been trying to convince allies to join an international coalition to protect shipping routes in the strategic passageway, following Iran's seizure of a British-flagged oil tanker.

The move came after British forces captured an Iranian oil tanker near Gibraltar, that the United Kingdom claimed was heading for Syria in a breach of European Union sanctions.

But Mr Morrison said he was yet to make a decision on joining that effort.

"We are consulting with other countries that [have] either indicated their preparedness to join such an operation and those who are considering it to ensure that we are fully informed of what the operations are and any role that Australia can play," he said.

"This is a very specific task that's about keeping shipping lanes open, about de-escalating tensions and ensuring that there is freedom of navigation.

"These issues are very important to Australia and all peace loving people."