Rolls Royce Submarines has won an £800 million contract aimed at delivering and supporting the UK's nuclear fleet - and with it 2,000 jobs.
The 10-year "foundation contract" is the first of three deals the Ministry of Defence (MoD) is expected to sign.
Across the programme, up to £900 million of savings are planned, with costs due to be £200 million lower as a result of this deal, Defence Minister Philip Dunne told the Commons on Wednesday afternoon.
In a written statement to MPs, Mr Dunne said the contract covered the overhead, running and business costs at Rolls-Royce Submarines sites.
He said the new deal consolidated costs, focussed on efficiency and secured future terms and conditions between the firm and the MoD.
And he said: "The foundation contract will help sustain around 2,000 jobs at Rolls-Royce Submarines in the UK, which provides a unique national strategic capability that has a vital role to play in meeting the present and future defence and security needs of the UK."