Arthur Rorris, secretary of the South Coast Labour Council said opposition from locals would be fierce.

"We will fight tooth and nail to prevent a nuclear target on our city," Mr Rorris said.

Port Kembla is one of three locations being considered by the government for the nuclear powered submarines that Australia would acquire from either the UK or US under the AUKUS agreement.

Other locations are Brisbane or Newcastle.

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Approximately $10 billion would need to be spent to upgrade existing infrastructure nationally to accommodate the new fleet of vessels and David Bridge, chair of industry group i3Net said businesses would not only benefit during the construction phase.

"It's not about the investment in the build of the facility, it's about the long term service and support. That could be a whole range of things including cleaning and maintenance facilities," Mr Bridge said.

If Port Kembla were to be the preferred location, it would be the first major defence facility for the Illawarra since World War II. Mr Rorris said unions would push back against the proposed facility.

"We are hoping that [Scott] Morrison is unleashing his most lethal weapon, a weapon of mass distraction. If, however, he is serious, then what he is likely to find in this region is that he will get a war, it won't be with China, it will be with the South Coast communities."

The Illawarra and Port Kembla in particular had been put forward as a location for Australia's future submarine fleet which would replace the ageing Collins class fleet that operates largely out of HMAS Stirling in Western Australia.

A 2015 report produced jointly by Liberal Senator Concetta Fierravanti-Wells, Labor MPs Sharon Bird and Stephen Jones, BlueScope and RDA Illawarra had suggested that Fleet Base East, now located at Garden Island in Sydney, could move to Port Kembla.

However, Port Kembla also has a history of opposition to military action, with dockworkers in 1938 refusing to load pig iron to be shipped to Japan after the nation attacked China and committed the massacre at Nanking in 1937.

"It is very clear that the sentiments against nuclear facilities in our region go well beyond the trade union movement, but the unions have played a driving role in pursuing a nuclear free status for our city and our region," Mr Rorris said.

Wollongong City Council last reiterated its commitment to remain a Nuclear Free Zone in 2006 and Wollongong-based director of the International Campaign to Abolish Nuclear Weapons (ICAN) Australia, Gem Romuld, said if nuclear-powered submarines were based in Port Kembla, that it would be a set back for the region.

"Australia did have a strong reputation on nuclear non-proliferation, but that reputation has been totally shredded," she said.

Port Kembla's proximity to skilled workforces, Australia's only nuclear reactor at Lucas Heights and existing defence facilities in the Shoalhaven and Sydney, as well as space at the port itself for development, makes the location a likely choice, and Mr Bridge said the region also has untapped defence capabilities.

"With the industrial, research and the knowledge base of the Illawarra, the region would be well placed to capitalise on any investment and an east coast submarine base."

Ms Romuld said that basing submarines in Port Kembla puts a target on the region.

"Such an attack, or even an accident, involving a submarine in Port Kembla would risk radioactive contamination."

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