Australian stock exchange operator ASX said it had hired Tata Consultancy Services (TCS) to overhaul its clearing and settlement software, opting for a route that will take less customisation after ditching a much-criticised blockchain-based effort.

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The choice is a major departure from its decision in 2017, announced with much fanfare, to be at the vanguard of adopting blockchain-like technology for use in critical financial architecture, an attempt that resulted in repeated delays before it was shelved last year.

It also represents a more cautious approach: ASX will switch to the new software in stages, rather than the "big bang" changeover that its users considered risky. That will, however, take time, with the overhaul now expected to finish in 2029, some 13 years after it began.

India-listed TCS's software is used by exchanges around the world including in Finland and Canada for functions it would be expected to perform for ASX's Clearing House Electronic Subregister System, or CHESS, the Australian exchange said on Monday.

"They have a mature product and technology that they use to support quite a lot of customers," ASX Chief Information Officer Tim Whiteley said on a call with analysts and media.

"The amount of customisation is minimised," he added.

The failure of its blockchain-based project came after an external review found much of the code had to be rewritten. Digital Asset, the New York startup it hired at the time, declined to comment on Monday.

The failure also resulted in a A$176.3 million writedown and had shaken market participants' trust in ASX, the world's 17th biggest exchange that hosts companies worth a combined A$1.6 trillion ($1 trillion).

It also prompted the Australian Securities and Investments Commission (ASIC) to open an investigation into the exchange's disclosures about the project.

"This is an important decision by ASX but there is still a long way to go to deliver a CHESS replacement," ASIC Chair Joe Longo said in a statement.

"It will be critical for ASX to now focus on engaging with the market on the detailed design of the CHESS Replacement program with a realistic and achievable timeline for implementation," Longo added.

The ASIC statement did not mention the status of the investigation into ASX and an ASIC spokesperson was not immediately available for comment.

ASX shares were up 1.7 per cent in afternoon trade. Analysts welcomed the project reset despite reservations.

"While this decision marks a positive strategic step forward for ASX, the lengthy implementation timeframe and lingering uncertainty over medium-term operating cost and capex implications continue to cloud the cost outlook," Jarden analysts said in a client note.

ASX said it expected the first stage of the new project, clearing software, to cost between A$105 million and A$125 million with delivery around 2026. The cost and timing of the settlement and other software will be decided in 2024.