The decision to form the AUKUS security alliance and scrap the French submarine deal is "absolutely the right decision," according to ASPI's Michael Shoebridge.

"It's because our security environment that's deteriorated so rapidly and markedly in such a short period of time," he told Sky News Australia.

"The nuclear submarines are part of this deal, but there'll be other technologies and capabilities that turn up much faster like advanced missiles and unmanned undersea systems.

"And with the French, the bigger trajectory of French and European policy on the Indo-Pacific has a common view on the challenge of China.

"We will repair the relationship – but it's not going to be fast."