Australia says it has accepted a Japanese company's bid for a lucrative and hotly contested contract to build Australian naval vessels, expected to be worth 10 billion Australian dollars ($6.5 billion).

The Australian government aims to sign binding, commercial contracts with Mitsubishi Heavy and the Japanese government in 2026.

Japan’s Mitsubishi Heavy Industries won a multi-billion dollar deal to build a fleet of advanced naval frigates for Australia, boosting Tokyo’s ambitions to become a major exporter of military equipment and develop its defense sector.