French ministers branded it a “stab in the back” after Canberra struck a new security pact with the US and UK over the vessels, which can operate for months without having to surface.
The move meant that Australia ditched a £29 billion deal with a French shipbuilder for up to 12 conventionally powered, diesel-electric submarines.
Australian prime minister Scott Morrison acknowledged the damage to Australia-France ties.
But he said that he told French president Emmanuel Macron in June that Australia had revised its thinking on their deal and might have to make another decision.
“I made it very clear... about our very significant concerns about the capabilities of conventional submarines to deal with the new strategic environment we’re faced with,” he told 5aa Radio.
The new fleet is being built as China expands its navy and other military capabilities.
Beijing condemned the move as a “Cold War” mentality, an allegation rejected by Britain’s Defence Secretary Ben Wallace.
The Cabinet minister also emphasised that the UK was not seeking to “antagonise” France with the new partnership.
He said that the pact aimed to defend the “rules-based system and international law”, as China embarks “on one of the biggest military spends and military investments in history”.
Mr Wallace highlighted how Beijing was “growing its navy and air force at a huge rate” and is “engaged in some controversial areas and disputed areas”.