British defence giant BAE Systems has won a £20billion contract to build a new fleet of warships for Australia.

The company will provide nine submarine-hunting frigates as part of a deal that Theresa May hailed as a result of Brexit.

It saw off competition from Italian and Spanish rivals to secure the lucrative contract.

The deal will come as a major boost for UK ministers as they seek to help secure new business for British companies ahead of Brexit.

BAE Systems, which employs more than 83,000 people in 40 countries, was preferred to Spanish company Navantia and Italy’s Fincantieri.

Work on its 6,900-tonne Type 26 submarines only began last year, with the vessels not due to be completed until 2027.

The ships will be built in Adelaide, where around 4,000 jobs will be created, but will include systems manufactured by other UK companies. The deal is believed to be the UK’s biggest naval defence contract in ten years.

Britain has already purchased eight of the next-generation vessels, which are due to be deployed by the Royal Navy in the late 2020s.

Downing Street said Ms May had been directly involved in supporting the bid, including lobbying her Australian counterpart, Malcolm Turnbull, on behalf of BAE Systems.

Welcoming the announcement, Ms May said: “The sheer scale and nature of this contract puts the UK at the very forefront of maritime design and engineering and demonstrates what can be achieved by UK industry and government working hand-in-hand.

“We have always been clear that as we leave the EU we have an opportunity to build on our close relationships with allies like Australia. This deal is a perfect illustration that the government is doing exactly that.

“And while this is an enormous boost for the UK economy, it will also cement our strategic partnership with one of our oldest and closest friends for decades to come.”

The biggest issues facing UK on leaving EU Show all 8 1 /8 The biggest issues facing UK on leaving EU The biggest issues facing UK on leaving EU Post-Brexit immigration workers sorting radishes on a production line at a farm in Norfolk. One possible post-Brexit immigration scheme could struggle to channel workers towards less attractive roles - while another may heighten the risk of labour exploitation, a new report warns. PA The biggest issues facing UK on leaving EU Customs union A key point in the negotiations remains Britain's access to, or withdrawal from, the EU customs union. Since the referendum there has been hot debate over the meaning of Brexit: would it entail a full withdrawal from the existing agreement, known as hard Brexit, or the soft version in which we would remain part of a common customs area for most goods, as Turkey does? No 10 has so far insisted that “Brexit means Brexit” and that Britain will be leaving the customs union, but may be inclined to change its position once the potential risks to the UK’s economic outlook become clearer. Alamy The biggest issues facing UK on leaving EU Northern Ireland-Irish border Though progress was made last year, there has still been no solid agreement on whether there should be a hard border between Northern Ireland and the Republic of Ireland. To ensure borderless travel on the island, the countries must be in regulatory alignment and therefore adhere to the same rules as the customs union. In December, the Conservative Party’s coalition partners, the DUP, refused a draft agreement that would place the UK/EU border in the Irish Sea due to its potential to undermine the union. May has promised that would not be the case and has suggested that a “specific solution” would need to be found. Getty The biggest issues facing UK on leaving EU Transition period Despite protests from a small number of Conservative MPs, the Government and the EU are largely in agreement that a transitional period is needed after Brexit. The talks, however, have reached an impasse. Though May has agreed that the UK will continue to contribute to the EU budget until 2021, the PM wants to be able to select which laws made during this time the UK will have to adhere to. Chief negotiator Michel Barnier has said the UK must adopt all of the laws passed during the transition, without any input from British ministers or MEPs. EPA The biggest issues facing UK on leaving EU Rights of EU citizens living the UK The Prime Minister has promised EU citizens already living in the UK the right to live and work here after Brexit, but the rights of those who arrive after Brexit day remains unclear. May insists that those who arrive during the transition period should not be allowed to stay, whereas the EU believe the cut-off point should be later. Getty The biggest issues facing UK on leaving EU Future trade agreement (with the EU) Despite this being a key issue in negotiations, the Government has yet to lay out exactly what it wants from a trade deal with the EU. Infighting within the Cabinet has prevented a solid position from being reached, with some MPs content that "no deal is better than a bad deal" while others rally behind single market access. The EU has already confirmed that access to the single market would be impossible without the UK remaining in the customs union. Getty The biggest issues facing UK on leaving EU Future trade agreements (internationally) The Government has already begun trying to woo foreign leaders into prospective trade agreements, with various high profile state visits to China, India and Canada for May, and the now infamous invitation to US President Donald Trump to visit London. However the UK cannot make trade agreements with another country while it is still a member of the EU, and the potential loss of trade with the world's major powers is a source of anxiety for the PM. The EU has said the UK cannot secure trade deals during the transition period. EPA The biggest issues facing UK on leaving EU Financial services Banks in the UK will be hit hard regardless of the Brexit outcome. The EU has refused to give British banks passporting rights to trade within the EU, dashing hopes of a special City deal. However according to new reports Germany has suggested allowing trade on the condition that the UK continues paying into the EU budget even after the transition period. Getty

Gavin Williamson, the defence secretary, said: “This is the dawn of a new era in the relationship between Australia and Great Britain, forging new ties in defence and industry in a major boost as we leave the European Union.”

Australia is high on the list of countries the UK hopes to do a trade deal with after Brexit. A number of ministers, including Boris Johnson and Liam Fox, have visited the country in recent months in an attempt to help pave the way for such an agreement.

Mr Fox, the international trade secretary, said: “The UK and Australia already enjoy a strong trading relationship worth more than £13bn a year. Today’s announcement is a further boost to this relationship which will create significant opportunities for companies in both countries to deepen their trading ties.

“As an international economic department, we are excited for the opportunities this will bring to both our nations including increased data and information sharing, high-end technology transfer, and collaboration at the cutting-edge of maritime expertise.”

Last week, BAE Systems secured a £150m contract to sell tanks to the US Marine Crops.

The company will initially provide “amphibious combat vehicles” and has options to build a total of 204 tanks as part of a deal that could be worth up to £910m.

Commenting on the successful bid for the Australian contract, Charles Woodburn, chief executive of BAE Systems, said:“BAE Systems’ selection as preferred tenderer for SEA 5000 reinforces our position as a leading designer and builder of complex maritime platforms.