Aukus deal: US, UK and Australia agree on nuclear submarine project
No decision has been made on a future east coast submarine base, although Port Kembla near Wollongong, 100km (62 miles) south of Sydney, is thought to be a likely location.
A local official there said her community was worried by the possibility of a nuclear submarine base close by.
"It's causing alarm that it could make us a potential military target," Greens party councillor Cath Blakey told the Australian Broadcasting Corporation.
"I think it's a potential sovereign risk to Australia to be hitching ourselves to the US and the UK."