The Albanese government is set to unveil the reforms on Monday, with a new agency to have oversight of the capability and budgets of three areas within Defence, a departmental source confirmed.
These include the Capability Acquisition and Sustainment Group, which exists to meet the needs of military equipment and supply.
Addressing an Australian Industry Group event, Defence Industry Minister Pat Conroy said he and Defence Minister Richard Marles had been "very frank" about their strong intention to continue the reform agenda they started in late-2022.
"That process is making a huge difference to how we deal with sophisticated projects," Mr Conroy said last week.
"It gets more attention of both the companies and Defence.
"It clears roadblocks and it actually is making a meaningful difference."
The changes are aimed at improving the accountability of Defence decision-makers.
An auditor-general's report released earlier this year revealed Defence had failed for almost two and a half years to provide formal updates to Mr Marles on the readiness of the army, air force and navy.
"Everything's on the table, including bureaucratic Âreform of the Department of Defence, of the Australian Defence Force and of defence agencies," Mr Marles told a conference in June attended by senior military officers.
