The Australian government is to invest up to AU$4.3bn (£2.4bn) developing Western Australia’s first dry-dock for large naval vessels.

Government-owned Australian Naval Infrastructure will oversee the design and construction of the infrastructure, with work to start in 2023 and initial operations to begin in 2028.

The national and Western Australian governments will work with industry to develop a masterplan for the defence precinct at Henderson.

This project is likely to create at least 500 direct construction jobs at its peak and thousands more through local sub-contracts and the national supply chain.  Once completed, the infrastructure will help support at least 2,000 direct shipbuilding jobs at Henderson.

Prime minister Scott Morrison said that Western Australia was a central pillar to the government’s commitment to growing sovereign capabilities and turbocharging our national naval shipbuilding. “This is a US$4.3 billion vote of confidence in Western Australia’s shipbuilding capabilities, jobs, training and the critical role that Western Australia plays in defending Australian and powering our national economy,” he said. “This multi-billion dollar infrastructure investment will transform the Henderson maritime precinct into a world-class shipbuilding powerhouse, and demonstrates our ongoing commitment to naval capability in the west.

Minister for defence Peter Dutton said the project builds on the government’s previous AU$1.5bn commitment to infrastructure improvements at HMAS Stirling and the Henderson maritime precinct.