Canberra, Sep 25 (IANS): Japan is willing to build the Royal Australian Navy's next-generation submarines in Australia, if awarded the federal government contract, the country's ambassador said on Friday.

Japan could work with Australian shipbuilder ASC to deliver the submarines, pending the approval of the Australian government, Xinhua news agency quoted Ambassador Sumio Kusaka as saying.

Japan joins firms from France and Germany in revealing they are willing to bring construction to Australia, in a deal set to be worth at least $16 billion, with billions more to be spent on maintenance and upgrades.

The government has told potential suitors that the submarines have to be built locally in order to protect local industry as without a submarine contract hundreds of Australian ship-builders could be left jobless.

"We will go along with whatever decision the Australian government makes," Kusaka said.

Meanwhile, Australian Industry Minister Christopher Pyne said his country was spoilt for choice when it comes to deciding on a building partner.

He said with Japan, Germany and France agreeing to use Australian shipyards -- most likely in South Australia -- the Australian economy would get a major boost.