The Army has signed a £3.5 billion deal ahead of the Nato summit on Thursday for nearly 600 armoured vehicles, which is expected to create 1,300 jobs across the UK.
The deal for the 589 Scout Specialist Vehicles is the biggest single order for armoured vehicles that the Ministry of Defence has placed in 30 years.
The first deliveries of the vehicles are expected in 2017, with a training establishment due to be equipped by 2019 and the first brigade set to be deployed in 2020.
General Dynamics in Caerphilly county won the contract ahead of the two-day summit in Newport, Wales, where the UK will call of increased defence spending by a number of Nato’s 28 member states.
Prime Minister David Cameron said he is “delighted” to announce the biggest single contract for armoured vehicles for the army since the 1980s on the eve of the Summit.
"These new vehicles are testament to the world-class engineering skills in south Wales and across the UK, helping to create the Army's first fully-digitalised armoured vehicles,” Mr Cameron said.
“Not only will they be crucial in helping to keep Britain safe, they will also underpin nearly 1,300 jobs across the UK and showcase the strength of the UK's highly skilled defence sector.
"With the second largest defence budget in Nato, meeting Nato's two per cent of GDP spending target and investing in new capabilities to deal with the emerging threats, we are ensuring Britain's national security, staying at the forefront of the global race and providing leadership within Nato,” he added.
Defence Secretary Michael Fallon is expected to call on Nato member states to increase their military spending in a speech on Wednesday.
He will say: “"Not only is there a real risk of equipment obsolescence amongst Nato's European allies, but investment underpins our vital transatlantic bond," he will say.
"Nato was formed on the basis that Europe would pay her way.
"Like any insurance policy, defence only pays out when you pay in.
"US taxpayers won't go on picking up the cheque if we choose to prioritise social welfare spending when the threats are on our doorstep."