The Federal Government today announced its preferred option will be the General Atomics MQ-9B 'Sky Guardian'.

Australia is already buying at least six MQ-4C Triton long-range maritime surveillance drones from Northrop Grumman.

Tindal RAAF Base has already been named a forward operating base for the fleet of remotely-piloted unarmed aircraft.

There was no information provided today on where the armed drone aircraft would be based although it would seem likely Tindal would be considered.

The government is spending $1.3 billion to deliver a cutting-edge armed remotely-piloted aircraft system with today's selection of the General Atomics MQ-9B 'Sky Guardian'.

The next phase will focus on developing the MQ-9B acquisition proposal, which is scheduled for government consideration in 2021-22.

Defence Minister Linda Reynolds said this project would deliver Australia's first armed Medium Altitude Long Endurance Remotely Piloted Aircraft System.

"Cutting-edge technology of this kind, with advanced sensors and systems, would complement advanced aircraft such as the F-35 Joint Strike Fighter and ensure that Australian Defence Force maintains state-of-the-art capability," Minister Reynolds said.

The government is spending several billion dollars upgrading Tindal for the arrival of a squadron of 16 F-35 JSF's from 2022, with a price tag of about $2 billion.

The Tindal runway is to be upgraded for the KC-30A Multi Role Tanker Transport and also to accept bigger US military aircraft as part of increased US-Australia defence partnerships.

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