Undated file photo showing the Lockheed Martin US101 test helicopter.
Undated file photo showing the Lockheed Martin US101 test helicopter.

Australia has aborted its AU$7 billion JP9102 project with Lockheed Martin, which aimed to create the country's inaugural sovereign satellite communication system, covering the Indo-Pacific ocean regions.

About eighteen months ago, Lockheed Martin was awarded the contract, according to which, the U.S. defense giant was to deliver three locally controlled geostationary communications satellites adept to effectively thwart cyber and electronic warfare attacks. However, now, the Australian Department of Defence has backtracked on its decision, stating the deal didn't align with their "strategic priorities," reported ABC.

"With the acceleration in space technologies and evolving threats in space since the project's commencement, defence has assessed that a single orbit GEO-based satellite communications system would not meet strategic priorities," the statement read.

"As such, defence has decided to cease its current procurement activity with Lockheed Martin Australia for a single orbit GEO-based satellite communications system."

Lockheed Martin was named the top bidder for the contract, leaving behind Airbus, Northrop Grumman, and Optus, but no work had been assigned. Australian Prime Minister Anthony Albanese told ABC that the Labor acted in the best interest of the nation to detach itself from the deal.

"We're busy prioritising all of our purchases when it comes to defence assets, we've got a considerable increase in our defence budget and we'll make sure all of the decisions that we make are in our national interest," he told ABC.

"We are not only seeing advances with the AUKUS arrangements being on track and on time and on budget, we're seeing our capabilities increased with increased asset purchases, we are also very much interested in this being part of our 'future made in Australia' agenda."

The opposition slammed the decision to cancel the deal as "disgraceful," even as the ABC reported that the government was seeking cheaper alternatives.