Australian astronomers in partnership with the defence industry will use a radio telescope to track space junk up to 1000km away and travelling at up to eight kilometres per second.
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The technique uses a super-sensitive telescope to record radio waves bouncing off objects in Earth's orbit, and can be used to evaluate the risk of collisions that could destroy satellites.
"The reflected signals are received by the MWA (telescope), and we use them to track the objects," Curtin University Professor Steven Tingay said on Thursday.
"We can use the radio waves during both day and night, and when it is cloudy, so it can provide 24/7 surveillance in a way that other systems based on optical telescopes cannot."
Perth's Curtin University partnered with Adelaide company Silentium Defence to develop the technique.
Attending the opening of Silentium's new research and development facility on Thursday, Minister for Defence Industries Christopher Pyne said the funding was one of two government contracts awarded to the business.
"The second contract, valued at $647,000, will support the development of a capability to provide broad-area situational awareness for bases and vehicles," he said.
Silentium CEO James Palmer said the projects will lead to new export opportunities for Australia.
"The increasingly contested space surveillance industry is ripe for capitalisation and our products will help put Australia in the box-seat to make the most of that opportunity," Dr Palmer said.
Australian Associated Press
