General Dynamics United Kingdom Limited, which has three bases in South Wales, has been awarded a £330 million contract to design and develop the next-generation tactical communication and information system.
It is the initial phase of the MORPHEUS programme.
The system will be used to plan, deploy, manage and monitor communications and information for the Army. The Ministry of Defence says it will allow users to integrate new radios, applications and other system components faster and with greater ease.
The contract means 125 jobs will be created and 125 more supported.