Australia and Japan have reached the largest defence-industry agreement ever between both countries for the production of advanced warships for the Australian Navy, the country’s Minister for Defence Richard Marles said.

Australia will upgrade its naval force with 11 Mogami-class frigates, built by Japan’s Mitsubishi Heavy Industries, Marles said on Tuesday, with the Australian Broadcasting Corporation, ABC, reporting that the contract was worth $10 billion Australian dollars (some $6.5bn).

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

Mogami-class warships are advanced stealth frigates capable of launching long-range missiles, and have an operational range of up to 10,000 nautical miles (18,520km), compared with Australia’s current Anzac-class frigates, which have a range of about 6,000 nautical miles (11,112km), Marles said.

The new ships, which will be in service by 2030, also operate with a smaller crew than the Anzac class.

“It is a next-generation vessel. It is stealthy,” Marles said.

“It’s going to be really important in terms of giving our navy the capability to project, and impactful projection is at the heart of the strategic challenge,” Marles said, adding that the deal was also “a very significant moment in the bilateral relationship between Australia and Japan”.

Australia’s Minister for Defence Industry Pat Conroy said: “It will take our general purpose frigates from being able to fire 32 air defence missiles to 128 missiles, giving our sailors the cutting‑edge weapons and combat systems they need.”

While Canberra did not specify a price tag for the vessels, only that it was part of a broader 55 billion Australian dollars ($35.5bn) “investment over the decade for the Navy’s surface combatant fleet”, the Reuters news agency reported that the “three frigate contract” will see three ships built in Japan, and a remaining eight expected to be built by Australia.

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The contract for the frigates is Japan’s biggest and most significant defence deal since it lifted a decades-long ban on military exports in 2014, and only the second after it agreed to supply air defence radars to the Philippines.

Japanese Minister of Defence Gen Nakatani said it was a “major step forward in Japan’s defence cooperation efforts”.

“The benefits include enhanced joint operations and interoperability with both Australia and the United States,” he told a briefing in Tokyo.

“This collaboration is of significant security importance to Japan,” Nakatani said.

Negotiations will begin this year on a contract for the deal, which is expected to be signed in 2026, Australian and Japanese officials said.

Australia is in the midst of a major military restructuring announced in 2023, with a focus on long-range strike capabilities to better respond to China’s naval might.

It is striving to expand its fleet of major warships from 11 to 26 over the next 10 years.