Australian Prime Minister Julia Gillard announced in Sunday that Sydney naval base will be used to accommodate large cruise ships. Months ago Australian government advised against this proposal based on national security grounds.

Due to limited space Sydney is running out of docking spots and big problem in this major cruise destination is that some of the super liners cant fit under the city's Harbour Bridge.

Last year Sidney accommodated around 214 cruise ships, up from 150 the previous year. Current docking spots for the cruise ships is Overseas Passenger Terminal in Circular Quay or on the other side of the bridge at Barangaroo.

Earlier this year the New South Wales state government requested if the Garden Island navy base in Woolloomooloo could be used for cruise ships docking area.

In March national government announced a review saying Australia's national security should outweigh commercial considerations. Back in March Defence Minister Stephen Smith said "It's difficult if not impossible to envisage greater access in the short term."

In an address to the NSW Labor conference in Sydney, Gillard said the visit of Queen Mary 2 in March brought 2,500 visitors.

"Better use of Garden Island as a new gateway for international visitors to Sydney Harbour will pump millions of dollars into the local economy and create valuable tourism jobs."