more contracts!

The decision by aerospace engineer Quickstep to move its operations to Bankstown in Sydney's west makes up for Boeing's decision last year to relocate to Victoria, NSW Premier Kristina Keneally says.

The Australian engineering firm has signed a $580 million deal to manufacture parts for the air force's new Joint Strike Fighter, in the process relocating from Perth to Boeing's vacant site at Bankstown Airport.

The agreement signed with US aerospace giant Northrop Grumman will create 400 jobs in western Sydney, and inject millions of dollars into the local economy over the next 20 years.

The Quickstep deal comes less than a year after Boeing announced it would move its operations to Melbourne from Bankstown, costing NSW 350 jobs.

Ms Keneally said Quickstep's relocation to Sydney's west made up for the Boeing disappointment.

"It goes a long way, in fact exceeds it," Ms Keneally told reporters at Bankstown Airport.

"We're bringing here more jobs, we're bringing a long-term future, and we're bringing the prospect of more contracts coming to the Bankstown facility."

"Once you start to attract that sort of investment, it provides a honeypot effect, that is, others seek to come here because of the positive advantages that you gain."

Quickstep chief executive Philippe Odouard said his company had seen Boeing's decision to move its operations to Victoria as an opportunity to move to western Sydney and take advantage of its skilled workers.

"We have access to a very skilled workforce," Mr Odouard said.

"Remember, the aerospace industry is not extremely widespread in Australia.

"The fact that they are actually moving out is for us important, it gives us a lot of potential skills."

Quickstep was lured to western Sydney by the state and federal governments - the latter providing $10 million in assistance.

"The Joint Strike Fighter is a long-range stealth fighter - it is the future of planes and part of that will be made here in Bankstown,"federal Defence Materiel Minister Jason Clare said.

"That's terrific news for Bankstown. Around 3000 of these planes are expected to be built over the next 20 years and Quickstep plans to build parts for many of them."