Bosses of Australian Wool Innovation (AWI) on Wednesday unveiled a five-year plan to breathe new life into the industry and improve profitability through A$400 million worth of investment in wool research and development programs.

The blueprint aims to reduce production and supply chain costs by up to 20 per cent while at the same time doubling the profit per hectare of wool sheep and boosting demand for Aussie wool.

The strategy will be funded by industry levies which currently generate around A$70m a year. No details as to where the extra $A10m a year will come from were released.

AWI managing director, Col Dorber, said: "AWI will aim to achieve a commercially acceptable rate of return on its research, development and innovation activities and will also seek to maximise intellectual property value and return.

"The plan recognises the dramatic fluctuations in Australian wool production and marketplace dynamics that have taken place over the past 12 months."

Separately on Wednesday, it was revealed that Australian wool exports plunged 16.4 per in volume terms and 5.3 per cent in value terms to A$3.1 billion in the year to May compared to the year-ago period.

Figures from Woolmark Co showed China remained the main destination for Australian wool even though it imported 6.2 per cent less in the last 12 months than the previous year.