The assessment comes as Defence Minister Kevin Andrews visits Japan to inspect Soryus, tipped as the preferred option to replace Australia's Collin Class fleet.
Mr Andrews said the submarine was about the size Australia is looking for, but required some alterations.
The purchase of the subs has the personal backing of Prime Minister Tony Abbott.
But former commander of the Japanese submarine fleet Masao Kobayashi said he was not sure the high-tech build could be successfully carried out in the Adelaide shipyards.
"They don't enough skilled workers to fashion the high-tension steel; it's even hard to do in Japan," he said.
Captain Hisayuki Tamura from the Japanese Ministry of Defence also said Japan was best placed to build the high-tech submarines.
"It's the best conventional non-nuclear submarine and we have the best technology to build them," he said.
Another former Japanese submarine captain, Toshihide Yamauchi, said it was still to be negotiated just how much of the top secret Soryu technology can be handed over.
"Releasing the core technology is not an option for Japan," he said.
"We're worried about leaks to China once our technology is in Australia.
"We need to sort out expectations from both sides."
Mr Andrews said deciding how much of the secret technology was shared with Australia would be part of the competitive evaluation process.
"What we need to know is what they are at the outset, have an understanding of what's involved in making those design modification changes and ultimately we need to know what the cost is as well," he said.
The contract to build Australia's next fleet of submarines, worth about $50 billion, is between Japan, France and Germany.
Mr Andrews said a deal with any of the countries could involve the long-term training of staff in Adelaide.