Australia says it will significantly increase military spending and focus on the Indo-Pacific region amid rising tensions between the US and China.
Prime Minister Scott Morrison pledged A$270bn (£150bn; $186bn) to the defence budget over 10 years - a 40% boost.
He said Australia would acquire long-range missiles and other capabilities to "deter" future conflicts.
It was necessary because the region was the "focus of the dominant global contest of our age", he added.
Mr Morrison named several areas of tension including the border between India and China, and conflict over the South China Sea and East China Sea.
It follows deteriorating relations between Australia and China - which are widely seen to be at their worst in decades.
What is Australia spending money on?
The new 10-year budget - about 2% of GDP - replaces a previous decade-long strategy, set only in 2016, which had budgeted A$195bn.
Mr Morrison said most spending would go to upgrading arms and equipment, such as long-range missiles and anti-ship weapons. It could also develop a hypersonic weapons system.
Up to A$15b would be spent on cyber warfare tools - which the prime minister noted "says a lot about where the threats are coming from".
Last month, he warned that Australian institutions and businesses were being targeted by cyber attacks from a "sophisticated state actor". The remarks were broadly interpreted as aimed at China.
Why does Morrison say this is necessary?
He said tensions between the US and China had accelerated in recent years and their relations now were "fractious at best".
The pandemic had worsened these tensions and put the global security order at its most unstable point in decades, he added.
"The largely benign security environment... that Australia has enjoyed, basically from the fall of the Berlin Wall to the global financial crisis, that's gone," he said.
"State sovereignty is under pressure, as are rules and norms and the stability that these provide."
He said Australia would vigorously defend its democratic values and those of others in the region, adding that increasing military capabilities would help "to prevent war".
Under the 2016 strategy, military priorities had been split equally across that region but also on operations with Western allies, such as US-led missions in the Middle East.
What's been the reaction?
Analysts say the change shows Australia is trying to be strong in its own region and on its own resources.
"There's a great emphasis, implicitly, in Mr Morrison's speech, in recognising the rise of China and also that America may not be as big a help as it has been in previous years," said Sam Roggeveen from the Lowy Institute.Image copyright AFP/Getty Images Image caption US and Australian navy personnel mark a joint military exercise in the Pacific Ocean in 2017
Many have also interpreted the shift as Australia taking a more defined opposition to China's increasing influence in the region.
Relations with its biggest trading partner have further deteriorated in recent months, following Australia's push for a global probe into the origins of the Covid-19 virus.