Britain's government has awarded BAE Systems a US$4.9 billion (about RM23 billion) contract as part of the Aukus programme with Australia and the US to build attack submarines, defence minister Grant Shapps and the company said on Sunday.
The US, Australia and Britain in March unveiled details of the Aukus plan to provide Australia with nuclear-powered attack submarines from the early 2030s to counter China's ambitions in the Indo-Pacific.
BAE Systems said in a statement the defence ministry had awarded it the £3.95 billion funding to cover development work to 2028, allowing it to start detailed design work on the submarines.
"This multi-billion-pound investment in the Aukus submarine programme will help deliver the long term hunter-killer submarine capabilities the UK needs," Shapps said in the statement.
BAE Systems said manufacturing of the submarines would start towards the end of the decade with the first SSN-Aukus boat due to be delivered in the late 2030s.