SYDNEY (REUTERS) - Australia and France formally sealed an agreement on Tuesday (Dec 20) under which French naval contractor DCNS will build a new fleet of submarines, a deal worth A$50 billion (S$53 billion).
Australia selected DCNS in April as its preferred bidder to build its fleet of 12 submarines, ahead of other offers from Japan and Germany.
The deal signed on Tuesday finalises one of the world's most lucrative defence contracts.
"This is a critically important step in the development of our security, in the assurance of our government in delivering Australians the security and prosperity that they need,"Australian Prime Minister Malcolm Turnbull said.
Australia's new fleet of submarines is the centrepiece of its defence strategy unveiled in February, which called for an increase in military spending of nearly A$30 billion over the next 10 years to protect strategic and trade interests in the Asia-Pacific region.
Australia rejected offers from Japan's Mitsubishi Heavy Industries and Kawasaki Heavy Industries, and Germany's ThyssenKrupp AG when selecting DCNS.
Earlier this year, DCNS was left reeling after details from more than 22,000 pages of documents relating to submarines it is building for India were published in The Australian newspaper, leading to concerns about the company's ability to protect sensitive data.
Australian government ministers said they were certain of maintaining the security of the new submarine fleet.
"We are continuing to invest in cyber security, which is a major part of warfare into the future," Defence Industry Minister Christopher Pyne said.