Australia's next submarine fleet will be nuclear-powered under an audacious plan that will see a controversial $90 billion program to build up to 12 French-designed submarines scrapped.

The nuclear submarines would likely be based in WA.

A well-placed military source has told the ABC the Defence Department's general manager of submarines, Greg Sammut, has called an urgent "clear lower decks" meeting for tomorrow morning to discuss the dramatic development.

The ABC has been told that news of Australia's decision was instead delivered to Paris by the secretary of the Defence Department Greg Moriarty.