An investment of £170 million into developing technology for British submarines, will secure hundreds of jobs in Barrow-in-Furness.
It will mean around 250 roles will be sustained at the BAE Systems shipyard.
The funding will be used help develop the next generation of Royal Navy submarines which will eventually replace the nuclear powered fleet of Astute Class submarines as they come out of service.
Defence Secretary Ben Wallace said: "This multimillion-pound investment ensures that this vital capability will be ready to replace our Astute Class submarines as they come out of service, whilst supporting high-skilled jobs across the Midlands and north-west of England.
"Marking the start of a new journey for the Royal Navy's submarines, British designers and engineers will lead the way in developing submarines for our Royal Navy."
Both BAE Systems shipyard in Barrow-in-Furness, Cumbria, and Rolls-Royce in Derby, have each been awarded £85 million contracts to carry out the work.
Submarine Delivery Agency CEO, Ian Booth said: "It is essential that work on the next generation underwater capability commences as early as possible.'
"Designing and building submarines is one of the most complex and challenging feats of engineering that the maritime industry undertakes."
"This relies on some of the nation's most experienced defence nuclear experts from the very beginning of the design phase."