The Australian government will pay French shipbuilder Naval Group 555 million euros ($583.58 million) in compensation after last year's decision to scrap the French submarine deal, Australian Prime Minister Anthony Albanese said on Saturday.

"This is a fair and equitable settlement," Albanese told a news conference. He said the settlement followed discussions with French President Emmanuel Macron, who he thanked for the cordial way in which the relationship between Australia and France was being re-established.