BAE Systems has been contracted to deliver the weaponry which is due to be completed by 2036.
The automated gun system increases productivity, reduces risk to sailor safety and increases operational capability, the weapons company says.
The navy's ANZAC class frigates have a five-inch gun and the new Hunter class has it in their design.
"The gun provides the ability to engage surface targets (ships) and shore bombardment," military strategy and maritime security expert Jennifer Parker said.
"HMAS ANZAC did this quite successfully during the Iraq war, known as five-inch Friday."
Five-inch Friday was the name given to the ANZAC assault on enemy bunkers, artillery positions and coastal defensive positions that enabled marines to seize the township of Al Faw and the port of Umm Qasr.
"The BAE contract effectively upgrades the control system's electronics," Ms Parker said.
"This will future-proof the weapons system, increase interoperability with the US and allow for the integration of extended range precision-guided munitions including the hyper-velocity projectile should Australia acquire this ammunition in the future."
The gun mount has a maximum capacity of 20 rounds, which can be fired in little over a minute at full speed.
Engineering and production will occur in the United States.
Australia's frigates have come under fire from the audit office, which found the $45 billion program for warships was subject to delays and cost blowouts after bureaucrats failed to assess its value for money.
Defence Minister Richard Marles has received a report into the navy's surface combat fleet that followed a landmark review of the Australian Defence Force.
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