Billed as Japan’s biggest defense export deal since World War II, Australia will pay $6 billion (10 billion Australian dollars) over the next 10 years to acquire the fleet of stealth frigates.

Australia is in the midst of a major military restructure, bolstering its navy with long-range firepower in an effort to deter China.

It is striving to expand its fleet of major warships from 11 to 26 over the next decade.

“This is clearly the biggest defense-industry agreement that has ever been struck between Japan and Australia,” Marles said, touting the deal.

“This decision was made based on what was the best capability for Australia,” he added.

“We do have a very close strategic alignment with Japan.”

Mitsubishi Heavy Industries was awarded the tender over Germany’s ThyssenKrupp Marine Systems.

Mogami-class warships are advanced stealth frigates equipped with a potent array of weapons.

Marles said they would replace Australia’s ageing fleet of Anzac-class vessels, with the first Mogami-class ship to be on the water by 2030.

“The Mogami-class frigate is the best frigate for Australia,” said Marles.

“It is a next-generation vessel. It is stealthy. It has 32 vertical launch cells capable of launching long-range missiles.”

The deal further cements a burgeoning security partnership between Australia and Japan.

Japan is deepening cooperation with U.S. allies in the Asia-Pacific region that, like Tokyo, are involved in territorial disputes with China.

Both Japan and Australia are members of the “Quad” group alongside India and the United States.

Japanese government spokesman Yoshimasa Hayashi said Tuesday the deal was “proof of trust in our nation’s high-level technology and the importance of interoperability between Japan’s self defense forces and the Australian military.”

It was also a “big step toward elevating the national security cooperation with Australia, which is our special strategic partner”, Hayashi told reporters in Tokyo.

‘More lethal’

Japan’s pacifist constitution restricts it from exporting weapons—but in 2024 Tokyo loosened arms export controls to enable it to boost sales abroad.

The order is Japan’s biggest defense export deal since World War II, according to local media.

Defense industry minister Pat Conroy said the Mogami-class frigates were capable of launching long-range Tomahawk cruise missiles.

“The acquisition of these stealth frigates will make our navy a bigger navy, and a more lethal navy,” he said.

The first three Mogami-class frigates will be built overseas, Conroy said, with shipbuilding yards in Western Australia expected to produce the rest.

Australia announced a deal to acquire U.S.-designed nuclear-powered submarines in 2021, scrapping a years-long plan to develop non-nuclear subs from France.

Under the tripartite AUKUS pact with the United States and the United Kingdom, the Australian navy plans to acquire at least three Virginia-class submarines within 15 years.

The AUKUS submarine program alone could cost the country up to $235 billion over the next 30 years, according to Australian government forecasts, a price tag that has stoked criticism.

Major defense projects in Australia have long suffered from cost overruns, government U-turns, policy changes and project plans that make more sense for local job creation than defense.

Australia plans to gradually increase its defense spending to 2.4% of gross domestic product—above the 2% target set by its NATO allies, but well short of U.S. demands for 3.5%.