Australia on Saturday announced a massive compensation deal with France's Naval Group for scrapping a landmark contract to build a fleet of diesel submarines.
Prime Minister Anthony Albanese said the French firm had agreed to a "fair and an equitable settlement" of 555 million euros (US$584 million) for ending the multi-billion-dollar contract.
The agreement draws a line under a bitter spat that derailed ties between Canberra and Paris for the better part of a year.
In September 2021, then-Australian prime minister Scott Morrison abruptly ripped up the French contract, which was years in the making.
He announced that Australia would be buying US or British nuclear-powered submarines, a major shift for a country with little domestic nuclear capability.
The decision drew fury from French President Emmanuel Macron, who publicly accused Morrison of deceit.
Relations were on ice until this May, when centre-left leader Albanese was elected.
The submarine contract is the centrepiece of Australia's race to develop its military capabilities, as it fears the threat from a more bellicose China under President Xi Jinping.
The nuclear-powered submarines are likely to give Australia the ability to operate more stealthily and pose much more of a deterrent to China.
{{/usCountry}}The nuclear-powered submarines are likely to give Australia the ability to operate more stealthily and pose much more of a deterrent to China.
{{/usCountry}}But there remains deep uncertainty about how quickly it can be implemented.
The first US or British submarines likely will not be in the water for decades, leaving a long capability gap as Australia's existing fleet ages.