South Australia wants the former Royal Adelaide Hospital site to house the nation's new space agency.

SA Premier Steven Marshall has met with the director general of the new Australian Space Agency, Megan Clark, to put forth the former hospital as a home for the new body.

The State Government says it could build a centre for innovation and entrepreneurship at the Adelaide site.

“We also believe that it would make a great centre for the national space agency which the Commonwealth Government is contemplating,” Mr Marshall said.

“From the South Australian Government's perspective, we're going to be as competitive and as compelling as we possibly can.

“We've had our initial meeting with Dr Clark. There's plenty of work to be done to really strengthen the bid before we finally submit it.

“The national space agency as envisaged by the Commonwealth isn't about sending someone to the moon or landing somebody on Mars, but it's really about using new space technologies, satellites, to monitor and gather data so that we can improve lives and improve productivity.”

Dr Clark is on a national tour to work on the structure of the space agency.

SA has its share of new space-focussed start-ups, including several satellite and nanosatellite companies.

The Federal Government has put up $41 million to to start the space agency, which officially began its operations from July 1.

However, its final home will be determined by a bidding war between the states and territories.

The NSW Government has hired Australia's first astronaut, Paul Scully-Power, to access contacts with global leaders in the space industry to “attract investment opportunities” and boost its bid to host the agency.

Western Australia's bid focuses on its physical location, which it says provides “space situational awareness and networks that require global coverage of space assets”.

Victoria has spruiked its ability to attract investment from big names in aerospace, including Lockheed Martin, Thales, Boeing and BAE Systems.