More than 100 build high-tech infantry fighting vehicles will be built in Victoria for the Army under a major defence contract worth billions of dollars.

South Korean company Hanwha Defence has won the right to manufacture the 129-vehicle fleet at its plant in Geelong.

The cost is expected to be between $5 billion and $7 billion, subject to final negotiations.

Defence Industry Minister Pat Conroy announced the contract on Thursday, saying it was one of the largest projects in the Army’s history.

“We’re also committed to building these vehicles in Australia,” he said.

“This represented the best value for money due to the compelling strategic advantages and the economic benefits to the nation.

“To maintain our national security, we need to be able to build critical defence capabilities here rather than relying on overseas supply chains.”

The fleet is being built under the Australian Defence Force’s long-running LAND 400 Phase 3 program – a project to acquire and support up to 450 infantry fighting vehicles.

The next-generation vehicles will replace the current M113 armoured personnel carriers. which have been in service since the mid-1960’s.

The first of the new vehicles will be delivered by early 2027, with all 129 to be completed by late 2028.

Mr Conroy said the vehicles’ capabilities include providing protection to soldiers, being able to manoeuvre in coastal areas and long-range firing.

“The interlocking capabilities will modernise the Australian Army to operate in a coastal environment … that will place the army at the heart of our strategy of deterrence,” he said.

Chief of the Army Lieutenant General Simon Stuart said the announcement was significant.

“Today’s announcement is a big step forward in Army’s ability to deliver on national defence with relevant and credible capability as part of an integrated ADF,” he said.

The announcement comes after the recent release of a defence strategic review, which recommended new infantry fighting vehicles for the ADF.

– AAP