HMAS Sydney was the first of four frigates selected to go under the A$1 billion FFG Upgrade, with HMA Ships Darwin, Melbourne and Newcastle following. The upgrade features an 8-cell Mk 41 Vertical Launch System (VLS) for 32 Evolved Sea Sparrow Missiles (ESSM), installed forward of the Mk 13 launcher. New diesel generators, new wiring and upgrades to the combat and air conditioning systems. Displacement has increased by 100 tonnes to 4,200 tonnes.
On 6 December 2004 HMAS Sydney began sea trials after completing the upgrade.