Russia's defence ministry said at least 14 sailors were killed by toxic fumes from the blaze on a naval research submersible but did not specify how many crew members were aboard.
Prime Minister Scott Morrison hailed the "very audacious plan" at a ceremony in Canberra as "part of Australia's biggest ever peace-time investment in defence".
Police detained Peter Madsen on August 11 last year when he emerged from his home-made submarine without Kim Wall who had boarded the vessel the previous day to interview him.
Inventor Peter Madsen has admitted to dismembering the corpse of journalist Kim Wall, but has denied murdering her aboard his home made submarine.
Argentina’s navy spokesman said the rescue mission for 44 missing submarine crew members had already "extended for more than twice what is estimated for a rescue."
The Argentine submarine ARA San Juan went missing in the South Atlantic last week with 44 crew members on board.
The search for a missing Argentine submarine has continued with improved weather as families of the submariners keep their hopes alive.
Argentina says that satellite calls detected over the weekend did not come from missing submarine, while storm weather hampers search for the vessel and its 44 crew members.
A storm on Sunday complicated the search for the navy submarine missing in the South Atlantic with 44 crew members, but relatives are hopeful that their loved ones will be found alive.
A massive search to locate the vessel which may have suffered a communication error has been initated, a navy spokesman says.
Peter Madsen, the owner of a home-built submarine told investigators that a missing Swedish female journalist died onboard in an accident and he buried her at sea.
Police say they are preparing to search a sunken submarine, owned by Danish inventor Peter Madsen, who has been charged with the inadvertent manslaughter of a journalist.
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