A demonstration contract for development of a Type 26 frigate for the Royal Navy has been given to BAE Systems by Britain's Ministry of Defense.
The Type 26 Global Combat Ship will be a multi-mission vessel capable of full spectrum of warfare operations as well as counter-piracy, humanitarian and disaster relief missions.
A total of 13 T26 warships are envisioned for the Royal Navy, entering service in the 2020s.
Construction of the first vessel is expected to begin in Scotland in 2016.
"We have a long and proud heritage of delivering complex warships in the UK and ...(this) announcement is a significant endorsement of the Government's commitment to sustain this important national capability," said BAE Systems Executive Officer Ian King. "We are committed to working with the Government, the Ministry of Defense and our partners in the maritime supply chain to ensure the Royal Navy has the capability it needs to protect national interests, while ensuring the best value for money for UK taxpayers.
"Through the Type 26 program, we are transforming the way we design and manufacture naval ships with innovative new technologies, leading-edge processes and modern infrastructure. New ways of working ensure we can continue to deliver the highest quality equipment at the lowest possible cost and compete effectively for future UK and international orders."
The contract, which takes effect in April, is worth more than $1.3 billion and follows an initial assessment phase for the warship.
BAE Systems said the award includes investment in essential long lead items for the ships -- such as gas turbines, diesel generators and steering gear -- and shore testing facilities.
About 1,700 jobs will be sustained by the T26 program.
"This is a substantial investment in our shipbuilding industry, safeguarding the jobs of 600 workers in Scotland and many more across the UK," said Prime Minister David Cameron. "Investing in these warships will ensure we continue to keep our country safe, at home and abroad."