The US-designed, locally made uncrewed vessels can be used by the Royal Australian Navy to strike opponents, deploy sea mines and undertake intelligence-gathering missions.
The drones will be deployed anywhere along Australia's coastline, Defence Industry Minister Pat Conroy told reporters on Monday.
Payloads - the part of the vessel that performs tasks such as delivering supplies or dropping mines - have now been incorporated into the submarines.
"The Ghost Shark now has teeth and we'll have the ability to inflict damage on any potential adversary," Mr Conroy said.
The drone program forms part of the $386 billion AUKUS defence pact between Australia, the US and the UK.
Ghost Sharks, made by American company Anduril Industries, are central to the Defence Department's focus on drones.
Defence is spending more than $1.5 billion on the vessels, which accompany the sky-bound Ghost Bats.
Many details of the underwater drones, such as their maximum range, speed and size, have been kept closely under wraps.
"Today highlights the rapid maturity of the Ghost Shark program, transforming it from a highly capable mechanism for delivery to a proven, potent and mission-ready capability being delivered at scale," navy chief Vice Admiral Matt Buckley said.
"The reality is that to protect a country the size of ours requires the fusion of crewed and uncrewed capabilities," he said.
The Ghost Shark program forms part of AUKUS's second pillar, which is focused on the development of high-tech military capabilities amongst the three allies.
The first pillar is centred on the delivery of a fleet of nuclear-powered submarines.
The Ghost Sharks will be pitched to other AUKUS members during defence exercises in San Diego.
Their maker, Anduril, specialises in advanced autonomous systems and is owned by several entrepreneurs, including Palmer Luckey, the billionaire founder of virtual-reality headset developer Oculus.
The Ghost Sharks are being built in a secret Sydney factory, opened specifically to manufacture them.
It includes an in-water testing tank and artificial intelligence capabilities.
AUKUS's five-year anniversary was marked recently with intense debate over the agreement's future.
Experts are divided on the expediency of the pact, with critics pointing to the cost and uncertainty surrounding the nuclear-submarine program and the tethering of Australian security to US interests.
But proponents point to the three-nation deal as the best way to defend Australia from looming Chinese threats in the Pacific.
The deal was sealed in 2021 under former Liberal prime minister Scott Morrison and the Biden administration in the US.
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