The contract will enable the Company's Submarines business to progress the early stages of a programme to deliver a replacement for the Astute class, helping to sustain the UK's future underwater military capability and support 250 highly-skilled jobs in Barrow-in-Furness, Cumbria.
Ben Wallace, the Secretary of State for Defence, said: “Marking the start of a new journey in submarine development, British designers and engineers will lead the way in building submarines for our Royal Navy.
“This multi-million 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.”
Ian Booth, Submarine Delivery Agency CEO, said: "Although it is too early to determine what the capability solution will be, designing and building submarines is one of the most complex and challenging feats of engineering that the maritime industry undertakes. Such work relies on some of the nation’s most experienced defence nuclear experts from the very beginning of the design phase."
Steve Timms, Managing Director of BAE Systems’ Submarines business, said: "We’re very proud of our role in the delivery of the nation's submarine fleet and this contract further builds on our rich heritage.
"In what is the 150th anniversary year of our Barrow shipyard, we now have the opportunity to further strengthen our partnership with the Royal Navy long in to the future.
"We’re looking forward to working with our partners and helping to deliver another strategically important and critical national defence programme."
The contract has been awarded following approval of a three-year Programme, Definition and Design phase for a capability solution for the MOD's Maritime Underwater Future Capability (MUFC) programme.
BAE Systems will work alongside the SDA, Rolls-Royce, Babcock and partners on a new class of nuclear powered attack submarines for the UK Royal Navy to replace the Astute class - currently referred to as SSN-Replacement (SSNR).
Four of the seven Astute submarines have already been delivered to the Royal Navy, while the remaining three are at an advanced stage of construction at BAE Systems' site in Barrow. BAE Systems is also a member of the Dreadnought Alliance and, working alongside the SDA and Rolls-Royce, is leading the design and build of a replacement for the Vanguard class. Build of the first two of the four new Dreadnought class submarines is well underway in Barrow.