The independent defence force would be primarily tasked with guarding Scotland and its closest neighbours, but could contribute to international peacekeeping and humanitarian missions "over time", Alex Salmond told an audience in Shetland today.
But he said it is "inconceivable" that an independent Scotland would have taken part in the war in Iraq.
Independence would allow Scotland to keep the pound and gain powers over taxation and economic regulation as well as a seat on the European Council of Ministers, he said.
Scotland could retain the monarchy but make it clear that "sovereignty lies with the people", he added.
Today's speech in Lerwick is part of a series of summer outreach visits by the Scottish cabinet and primarily focused on defence.
"Scotland is actually part of six unions, and the requirement and absolute necessity is to be independent from one: the political and economic union that ties us to Westminster," he said.
While the social union will continue to flourish regardless of the constitutional position, the SNP would actively seek to maintain the European Union, the currency union, the union of the crowns and the defence union through Nato, according to Mr Salmond.
"We would hope to change them, certainly, improve them, absolutely, but basically maintain these unions," he said.
"The SNP's view is that we can use the powers of independence to make these five unions work more effectively both for Scotland and our neighbours.
"We should have our own representatives in the EU Council of Ministers and do it without the obsessive negativity of the UK's relationship with the rest of the continent.
"We should keep the pound sterling, but we should gain powers over taxation, borrowing, welfare, economic regulation and energy markets which would allow us to build a fairer and more prosperous country.
"Like 16 other independent nations in the Commonwealth we should retain the monarchy, but the people of Scotland can still draft a new constitution making it clear that sovereignty lies with the people."
He said independence would allow Scotland's armed forces "to develop roles and capabilities appropriate to our position and our size", taking into account the increased importance of the North Sea as global warming opens up new shipping lanes and energy sources.
"Our capabilities will primarily contribute to our security and those of our closest neighbours," he said.
"Over time, it would enable us to contribute to international operations such as peace building and humanitarian missions.
"So, just as Scotland would develop our own capabilities, we would also develop our own approach to defence policy.
"This government has already stated its view that a written constitution should include safeguards about committing our armed forces.
"It should require that military action is in accordance with the United Nations charter and set out a clear role for parliament in decisions on overseas deployment of Scottish forces."
He added: "It is inconceivable that an independent Scotland would have taken part in the illegal and costly invasion of Iraq - costly not just in terms of money, but in terms of human life.
"And an independent Scotland will no longer keep Europe's largest concentration of weapons of mass destruction within 30 miles of our largest city."
A Scotland Office spokesman said: "Yet again the Scottish Government have passed up an opportunity to share a coherent, positive and substantive plan with the people of Scotland on how they propose to maintain Scotland's defence and security, and sustain thousands of jobs in Scotland's defence industry.
"The UK has one of the world's biggest defence budgets which brings security to Scots at home and around the world and jobs to thousands here in Scotland.
"Scotland benefits from being part of the UK and the UK benefits from having Scotland within the UK. Together we are safer and stronger together."
He said the number of UK armed forces personnel in Scotland will rise to 12,500 by 2022, the highest number since 2007, if Scotland votes no to independence.
Scotland would also remain home to seven army brigades, three new army reserve units, all of Royal Navy's submarines and one of three fast jet bases.