Britain will set up a permanent military base in the Middle East for the first time in more than four decades.

Four minesweepers have operated from the Mina Salmon port in Bahrain, but the new facility will also be a base for much larger ships including destroyers and aircraft carriers.

Foreign secretary Philip Hammond said the deal with Bahrain would guarantee the Royal Navy’s presence in Bahrain well into the future. He said: “The expansion of Britain’s footprint builds upon our 30-year track record of Gulf patrols and is just one example of our growing partnership with Gulf partners to tackle shared strategic and regional threats.”

Defence secretary Michael Fallon said Britain would now be based in the Gulf again for the long term. The rise of Islamic State, fears over Iran and ongoing instability in the region contributed to the decision to establish the new naval base, which is adjacent to a more substantial US facility, home to the fifth fleet. Bahrain will contribute most of the £15m cost of construction, with the UK picking up the ongoing costs.

Chief of the defence staff, general Sir Nicholas Houghton, said the deal was symbolic and strategically important. “Rather than just being seen as a temporary deployment to an area for a specific operational purpose, this is more symbolic of the fact that Britain does enjoy interests in the stability of this region,” he told BBC Radio 4’s Today programme.

“And the fact that the Bahraini authorities and government agreed to fund infrastructure within the country to base our maritime capability forward, both is a recognition from their perspective of the quality of the relationship with the United Kingdom, but also of our interest over time in maintaining the stability of this very important area.”

Bahrain’s foreign minister Sheikh Khalid bin Ahmed bin Mohammed Al-Khalifa said the agreement underlined its commitment to work with the UK and other countries to address threats to regional security.

Lobby groups including Human Rights Watch have criticised Bahrain’s record on human rights. Despite the Arab spring uprisings, Britain, the US and Saudi Arabia have supported the government following widepsread public protests in March 2011. The uprising led to the cancellation of a Formula One race due to take place in Bahrain that year.

John Horne of Bahrain Watch said in May: “There is growing frustration about the UK government’s increasingly visible support for Bahrain; [it] has a long, dark history of enabling state violence in Bahrain and protecting both British and Bahraini officials responsible.”

In 2012 King Hamad pledged to implement the recommendations of an independent commission to examine the roots of the country’s crisis, but reform has been slow.

Britain moved its main regional naval base from Aden, the seaport in Yemen, to Bahrain on the Persian Gulf in 1967. The following year the government said it would close UK military bases east of the Suez canal by 1971.

Bahrain declared independence from Britain in 1971 and signed a new treaty of friendship with the UK. It also struck an agreement with the US that permitted it to maintain military and naval facilities in the kingdom.