Senator Michaelia Cash, the acting Minister of Industry, Innovation and Science, announced the initiative on Monday morning.

"The global space industry is growing rapidly and it's crucial that Australia is part of this growth," she said.

"A national space agency will ensure we have a strategic long-term plan that supports the development and application of space technologies and grows our domestic space industry.

"The agency will be the anchor for our domestic coordination and the front door for our international engagement."

The establishment of the agency is one of the recommendations made by a government reference group currently reviewing the potential for Australia's space industry.

The group is chaired by former CSIRO chief Dr Megan Clark.

The ACT, the Northern Territory and South Australia have publicly announced their intentions to work together in the establishment of such an agency.

Each jurisdiction will offer their assets and capabilities to help bolster Australia's space standing.

Canberra has offered brains, South Australia land and research, and the Northern Territory its vast land primed for launch.