Japan and Australia are leaning toward a multibillion-dollar sale by Tokyo of a fleet of stealth submarines to Canberra's military, in a move that could rile an increasingly assertive China, people familiar with the talks said.

An agreement is still some months away, three people said, but the unprecedented sale of off-the-shelf vessels based on the Maritime Self-Defense Force's Soryu class sub is emerging as the likeliest option.

Such a deal would signal a major expansion of Prime Minister Shinzo Abe's controversial drive for a more active military after decades of pacifism. Rival China regularly accuses Abe of reviving Japan's wartime militarism.