In a huge blow for Australia’s plans to acquire and eventually build nuclear submarines, the Pentagon has confirmed to 7NEWS that it is reviewing the $300 billion agreement.

Australia has already made a $500 million down payment to the United States for the first Virginia class vessels.

WATCH THE VIDEO ABOVE: US reviews AUKUS pact.

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A US Department of Defense official says AUKUS is being reviewed “as part of ensuring that this initiative of the previous Administration is aligned with the President’s America First agenda”.

“As Secretary Hegseth has made clear, this means ensuring the highest readiness of our servicemembers, that allies step up fully to do their part for collective defence, and that the defence industrial base is meeting our needs,” the official said.

“This review will ensure the initiative meets these common sense, America First criteria.”

The Albanese government has sought to reduce fears about the future of AUKUS.

Deputy Prime Minister and Defence Minister Richard Marles says the Government is “committed to AUKUS and we look forward to working closely with the US on the review”.

“The United States advised Australia and the UK of the review,” Marles said.

“It is natural that the administration would want to examine this major undertaking including progress and delivery, just as the UK government recently concluded an AUKUS review and reaffirmed its support including through the appointment of Sir Stephen Lovegrove as its AUKUS adviser.

“All three countries are committed to ensuring AUKUS meets national and trilateral objectives.

“Importantly, AUKUS will grow both US and Australian defence industry as well as generating thousands of new manufacturing jobs.

“There is bipartisan support in the United States with the passage of important provisions in the National Defence Authorisation Act in 2023 to enable the transfer of US Virginia class submarines to Australia, and to enable Australians to work on maintenance activities of US Virginia class submarines.”

“Our engagement with the Trump Administration and across the full political spectrum in the United States has shown clear and consistent support for AUKUS.”

7NEWS understands the issue has been raised with the Trump administration at all available opportunities by the prime minister and senior cabinet ministers.

Albanese and Trump are set to meet, face to face, for the first time on the sidelines of the G7 summit in Canada in the next week.

What is AUKUS?

Under the plan signed between former prime minister Scott Morrison and former United States president Joe Biden, the White House intends to sell Australia three Virginia Class SSNs (nuclear-powered submarines) from as soon as the early 2030s, which was authorised by the US Congress in December 2023.

Australia retains the option to seek approval for up to two more if needed.

Australia’s Submarine Agency says, “This acquisition will eliminate any capability gap and increase the three nations’ (Australia, UK and US) ability to deter aggression and contribute to peace and stability in the Indo-Pacific.”

Australia will then build its own nuclear powered submarines based off technology from the UK.

Australia’s nuclear-powered submarines - SSN-AUKUS - will be based on the UK’s next-generation design that incorporates technology from all three nations, including cutting edge US submarine technologies.

The UK will commence construction of its first SSN-AUKUS in Barrow-in-Furness UK, as early as the late 2020s. The UK intends to deliver its first SSN-AUKUS to the UK Royal Navy in the late 2030s.

Australia will begin building its first SSN-AUKUS in Adelaide, South Australia, by the end of this decade, and plans to deliver the first Australian-built SSN-AUKUS to the Royal Australian Navy in the early 2040s.