A relic of Australia's naval past will soon be history, with confirmation that Garden Island's hammerhead crane will disappear from Sydney's skyline.

The Parliamentary Secretary for Defence, David Feeney, announced on Thursday that the disused crane would be removed from the naval base, with $10.3 million allocated to do so.

“This is the right decision," Mr Feeney said.

"Removing this crane will eliminate the safety risk it currently poses to Royal Australian Navy personnel, it will allow navy to use Garden Island to its best possible advantage, and will save taxpayers around $700,000 a year."

Built in 1951, and one of only 15 still standing around the world, the crane has not been used since 1996.

The Department of Defence argued in May that there were "no prudent or feasible alternatives" to removing the 61-metre structure in order to free up berthing capacity for new ships due to enter service this year.

"By modern standards, even if it were to operate at full capacity, it would no longer be able to do the task required of it," Mr Feeney said.

Mothballing the crane at its current location on-site would cost $21 million, the report said, and restoring it to full working order would cost $31.1 million. This compared with an estimated $7.4 million to remove it.

The most expensive option – retaining the crane on-site and building a new dock east of Garden Island – was put at $123.7 million.

Salvaging heritage components from the crane was a condition of the Department of Sustainability, Environment, Water, Population and Communities' approval to remove it.

Mr Feeney said an archival record will be made of the crane, and its history will be documented in a heritage interpretation plan.

“We are talking about having some of the steel honoured and recognised in various museums like the war memorial," he said.

"There are audiovisual opportunities, and we will have footage of the crane both in its heyday and in its dismantling so people can see both what it did and how it once looked."

The National Trust of Australia's NSW conservation manager, Graham Quint, said it was extremely disappointed but not surprised by the decision.

The deteriorating crane was added to the trust's "heritage at risk" register in 2007, when a piece of corroded iron also fell from the structure.

Mr Quint said the trust had received little or no response from Defence to heritage concerns and alternative proposals.

"It's not as if they can't be done, but they've just ruled it out of order all along the way," he said. "Every time we've tried to suggest something to them, they just won't look at it."

The Defence report in May ruled out the idea that the crane should be retained at Garden Island as a tourist attraction – such as the proposal for its "adaptive reuse" as a restaurant lodged by the Luxcon Property Group in March – as "not viable without severely compromising the security and operations of the base".

"At this stage, no mature business case has been put forward," it said of publicly mooted commercial ventures, adding that suggestions at the time to relocate the crane off-site were "largely speculative".

Mr Feeney said it was not yet clear when – or how – the crane would be removed.

"At this stage we're talking about a contract being in place and I'm hoping that work could commence perhaps as early as the start of next year," he said.