The federal government today announced the establishment of an $82 million Defence Materials Technology Centre (DMTC) to drive innovation in defence technology.

Minister for Defence, Science and Personnel, Warren Snowdon and the Minister for Innovation, Industry, Science and Research, Senator Kim Carr, jointly announced the new centre which will commence operations in 2008.

The centre is a collaborative venture with Australian industry and the research sector and will focus on four key research programs: air platforms, maritime platforms, armour applications and propulsion systems.

"The Centre will deliver improved armour protection for military personnel carriers - vital for the protection of Australian troops deployed around the world - and new high-tech materials for use in major defence acquisitions such as the joint strike fighter," Snowdon said.

"To nurture the innovation needed to maintain defence capability and to address the skills shortage in this area, an education and training program will also be designed.

"The goal of this program will be to produce engineers and scientists with skills attractive to the defence industry and other research providers."

Senator Carr said small to medium enterprises (SMEs) will benefit from the centre through the establishment of a technology transfer program to help SMEs compete in the global manufacturing market.

"The Defence Materials Technology Centre marks an important milestone in the Australian government's commitment to improving defence capability through innovation," Senator Carr said.

"The Centre will enhance the nation's defence capability and Australia's international reputation for innovation by bringing together the combined expertise and resources of key industry representatives, universities and publicly funded research agencies."

A key element of the collaboration, and a cornerstone of the research, is the adoption and application of world leading materials engineering capabilities.

These will be used to develop, integrate and validate new materials and manufacturing technologies across existing and planned defence platforms and structures.

"The technology transfer program will ensure that the centre's benefits will spread well beyond the defence industry," Senator Carr said.

"It will assist areas as diverse as civilian aerospace and power generation, as well as in general manufacturing industries."

To be located in Victoria, the centre will receive $30 million from the federal government and a further $52 million from collaborative partners.

These partners include major companies such as BAE Systems Australia, GKN Aerospace, BlueScope Steel, Surface Technology Coatings, Thales Australia and the Cooperative Research Centre for Advanced Composite Structures.