Defence Minister Peter Dutton said the Defence Space Command would secure Australia’s place in the cosmos.
Air Vice-Marshal Cath Roberts, who will lead it, said she was “scared” by Australia’s inability to combat Beijing and Moscow’s activities.
The US, Russia and China are all believed to have tested weapons that could destroy a satellite in space.
The agency’s chief said a Chinese satellite could theoretically “take out” the National Broadband Network for regional Australia.
Her role includes increasing Australians’ “national understanding” of space threats.
Vice-Marshal Roberts said that “we are really tight with the US” and “we can rely on them to an extent, but we need to accelerate the capability so that we can deal with the threats”.
Mr Dutton said the Defence Space Command would initially be modest in scope, but that Australia would eventually need a “Space Force in the future” – a reference to the US Space Force launched in 2019.
He criticised “countries that see space as a territory for their taking, rather than one to be shared”.
Space will take on “greater military significance” in this century, Mr Dutton added, warning against it becoming an arena for conflict between nations.
The new agency’s members will come from Australia’s army, navy and air force, and will include private contractors.
Australia announced plans for the new agency last year. It will fall under the air force.
It follows the creation of the United States’ Space Force three years ago. That agency attracted some mockery on social media over its uniforms – with some asking why they needed to be camouflaged for use in space – and its official logo, which was said to resemble one from cult sci-fi TV series Star Trek.
The UK also launched a space command military centre in 2019.