A US navy sailor allegedly trapped in a paedophile sting faces up to 12 years in jail after pleading guilty Monday to using the Internet to groom a 14-year-old Australian girl for sex.

David Budd, 28, who had been taking part in joint US-Australia war games in northern Australia was arrested on arrival at Sydney airport on June 23 after an online conversation with a detective posing as a young girl.

Budd, who pleaded guilty in a Sydney court to using the Internet to groom a person under 16 years of age for sex, will be sentenced on August 31.

The sailor was granted bail at an earlier hearing on condition he did not associate in any way with a child under 16 and reported to police three times a week.

The US authorities indicated after Budd's arrest that they wanted him to be handed over to US military jurisdiction.

Australia is a close Washington ally and has deployed troops with the US-led coalition in both Iraq and Afghanistan.

Budd was in Australia to take part in military exercises codenamed "Talisman Sabre", which involve 7,500 Australian Defence Force personnel and 20,000 US troops.