"It was only a matter of time before the Australian government made a choice about the kind of defence force that we're going to have in the 21st century with the rapid deterioration in the strategic environment in recent years", Medcalf said.
Australia will purchase from the US Navy up to 200 long-range anti-ship missiles, which can travel up to 229 miles.
Defence Minister Linda Reynolds also said those threats extend far beyond theft and espionage to include aspects of cyber warfare that could disable Australia's electricity grids and air traffic control systems.
"We want an Indo-Pacific (region) free from coercion and hegemony".
Prime Minister Scott Morrison will reveal details of the military package on Wednesday
The Prime Minister did not blame any one country for the activity although it is understood Australian authorities believe China is responsible.
"We need to also prepare for a post-COVID world that is poorer, more risky and more disorderly", Mr Morrison said on Wednesday.
Mr Morrison says Australia will never surrender its sovereignty or seek to intimidate its neighbours.
Mr Morrison said tensions between the United States and China had been ramped up in recent years warned relations between the two were "fractious at best".
In a sign that Morrison's defense and intelligence network sees the threat of actual military engagement with an enemy in its region growing, Australia will alter the focus of its 2016 Defence White Paper.
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Australia has fought alongside the U.S. in every major war of the last century, often in areas far from its shores.
Australian officials believed that China was behind the cyberattack.
The move comes as US President Donald Trump is involved in tentions with China.
"China is the unspoken elephant in the room", said Sam Roggeveen, director of the Sydney-based Lowy Institute's International Security Program.
"While it's absolutely right that we focus on our region, but buying long-range missiles - particularly ones for land targets - could invite a response from Beijing".
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Australia has also announced its largest-ever investment in its cybersecurity capabilities.
The bilateral ties between the two nations soured and tensions increased when Australia banned the Chinese telecommunication giant Huawei for its 5G services for security concerns.
It followed Mr Morrison's public warning earlier this month that Australian governments, businesses and political organisations were coming under an escalating series of cyber attacks from a sophisticated "state-based" hacker.
With rising Australia-China tensions, the decision to boost defence spending is seen as Canberra's intention to be more assertive with Beijing and less reliant over the United States.
China denies that it was liable for the assault.
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China has suspended beef imports from four of Australia's largest meat processors and imposed hefty tariffs on barley, although both sides say that is unrelated to the latest dispute.