Defence Minister Peter Dutton has launched a new Space Command, declaring Australia must prepare itself as the realm takes on more strategic military importance.
The decision suggests the Morrison government could follow the United States in establishing a Space Force in the face of growing threats from countries.
The Defence Space Command would aim to develop Australia’s military space capabilities to protect intelligence, surveillance and reconnaissance assets such as satellites.
"(Space) will undoubtedly become a domain which takes on greater military significance in the 21st century," Mr Dutton told the air and space conference in Canberra on Tuesday.
"It is a domain which must be used to deter aggression, rather than become a new realm for conflict."
In his speech, Mr Dutton cited coercion and belligerence from countries such as Russia and China as signs of the need for hard power to defend against and deter such aggression.
He said "space is becoming more congested" as countries such as Russia and China develop hypersonic missiles capable of travelling more than 6,000 kilometres per hour.
Twelve months ago, the Royal Australian Air Force confirmed plans to follow other nations in setting up a new military Space Command.
The defence minister admitted Australia's model would be "modest" compared to other established bodies, including the US-style space force established by Donald Trump in 2019.
But he said it remained "a necessary endeavour, with a view to protecting our national interests, and our need for a Space Force in the future."
The US Space Force describes itself as a separate and distinct branch of the armed services, responsible for organising, training and equipping global space operations.
However, the announcement has not been without critics, including social media backlash against its logo, which some compared to the insignia used in "Star Trek".
The official U.S. Space Force seal was unveiled January 24, 2020 by President Donald Trump. Credit: Space Force/Cover Images/Cover Images
"For any nation losing access to space would have significant civil and military consequences," Mr Dutton said.
"We know that some countries are developing capabilities to threaten or degrade space networks to target satellites.
"Countries that see space as a territory for their taking, rather than one to be shared."
The defence minister has also opened a new cyber centre in Canberra, after warning that an expansion of "grey-zone activities" such as cyberattacks were making it harder to combat aggression.
The government says the new Australian Signals Directorate facility would bring together experts, federal police, the defence force and various department officials to enhance cyber defence and intelligence.
Russia used cyberattacks in the lead-up to its invasion on Ukraine to disrupt not only government and military systems, but also banks and civilian networks.
Hijacked Ukrainian government websites were also used to spread disinformation, Mr Dutton said as he raised concerns about foreign interference.
Russia, North Korea, Iran and China have been publicly named by Australia since 2017 as having launched malicious cyber activities.