SYDNEY (Reuters) - Australia has cancelled a multi-billion dollar military satellite project with Lockheed Martin ( LMT ), with a Department of Defence statement on Monday saying the military will instead shift its focus to a multi-orbit system.

Lockheed Martin Australia was announced as the preferred tenderer last year for the Geostationary Earth Orbit (GEO) satellite communications system, in a project that was to deliver Australia's first sovereign-controlled satellite communication system over the Indo-Pacific ocean regions.

The project for a single orbit satellite with Lockheed Martin ( LMT ) had been cancelled, the Department of Defence said in a statement on Monday.

"With the acceleration in space technologies and evolving threats in space since the project's commencement, Defence has assessed that a single orbit GEO-based satellite communications system would not meet strategic priorities," the statement said.

It said Australia would instead prioritise a multi-orbit capability to increase resilience for the Australian Defence Force.

In a radio interview with the Australian Broadcasting Corporation, Prime Minister Anthony Albanese said while Australia's defence budget was increasing, his government was prioritising its purchases.

When the Lockheed Martin ( LMT ) project was announced last year it was said by authorities to be a "multi billion dollar" deal, but in Monday's Defence statement there was no specific value to the cancelled project.

However, Defence said in the statement that it will still allocate A$9-12 billion ($13.87 billion) for space capabilities.

($1 = 1.5135 Australian dollars)