US leaders have hailed a “historic” milestone after key legislation to sell nuclear-powered submarines to Australia as part of the AUKUS pact cleared another major hurdle.

The critical legislation was passed by the US House of Representatives on Thursday (local time), a day after it cleared the Senate.

The National Defence Authorisation Act will need to land on President Joe Biden’s desk to be signed into law.

Washington is poised to sell Canberra at least three Virginia-class nuclear subs, with the first slated for the early 2030s.

They include two used submarines and one fresh off the production line.

The critical legislation enables the sale, and for Australia to transfer almost $4.6 billion to prop up the American industrial base so submarines can continue rolling off the production line.

The timing of the payment is being discussed between the two governments.

Defence Minister Richard Marles said it was a “very significant moment”.

“It’s really a colossal achievement and we very much want to thank the United States administration,” he told Sky News on Friday.

“We want to thank the Congress and all those members of the House and the Senate who worked so tirelessly to see this pass.”

Marles said Democrats and Republicans alike backed the new laws, and the deal also had bipartisan support in Britain and Australia.

“That is essential to ensuring that this can endure over a long period of time,” he said.

The bill had been held up with some Congress members pushing for a stronger commitment from the Biden administration for the domestic manufacturing industry to ensure the deal didn’t impact US submarine production.

Republicans and Democrats reached a compromise and it had been hoped the bill would clear Congress this week before lawmakers go home for the year.

The transfer of the Virginias will be the first time the US has sold a nuclear submarine to another nation and only the second time it has allowed another country to access coveted nuclear secrets, the other being Britain.

The sale forms the keystone of the AUKUS pact between Australia, Britain and the US.

The government has worked to tighten export control laws and to streamline technology sharing between the three nations to allow for smoother military collaboration.

The nuclear submarine agreement was “a game changer”, Democrat Senate majority leader Chuck Schumer said.

“It will create a new fleet of nuclear-powered submarines to counter the Chinese government’s threat and influence in the Pacific,” he wrote on X.

-with AAP