A £1.2 billion contract has been awarded to build the Royal Navy's new hunter-killer submarine HMS Audacious.
The Ministry of Defence (MoD) also announced that a further £1.5 billion has been committed to the remaining three submarines in the class.
The £1.2 billion contract with BAE Systems will safeguard 3,000 skilled jobs at Barrow in Cumbria.
Audacious is the fourth of seven Astute Class submarines being built for the Royal Navy. They are the most technologically advanced the Royal Navy has ever sent to sea and will progressively replace the Trafalgar Class currently in service.
The first two boats, Astute and Ambush, are currently undergoing sea trials to rigorously test their systems. The third boat, Artful, is reaching the final stages of her construction at Barrow shipyard.
Early work has been started on boat five, named Anson, while preparation has begun on as yet unnamed boats six and seven.
Last month it emerged that Astute encountered a flooding problem during sea trials, forcing the nuclear-powered attack vessel to resurface after it let in tens of litres of water.
Electrical switchboards were also found to be fitted incorrectly while concerns emerged about the accuracy of nuclear reactor monitoring instruments during testing last year.
The MoD said that electrical switchboards on board Astute, which ran aground near Skye off the west coast of Scotland in 2010, had not been fitted to Naval Engineering Standards and have since been reinstalled.
Concerns that nuclear reactor monitoring instruments were giving inaccurate readings because the wrong type of lead used in certain components were also raised during the trials.
The Astute class boasts a range of capabilities inside each 97-metre long hull. Powered by a Rolls-Royce nuclear propulsion system, the reactor never needs refuelling.
The sonar system has the processing power of 2,000 laptops and can track ships 3,000 miles away.
They are armed with both Tomahawk land attack missiles and Spearfish torpedoes, and her missiles have a target range of 1,200 miles with accuracy measured in metres.
Defence Secretary Philip Hammond said: "This contract marks an important step forward in the progress of our Attack Submarine programme and moves the Royal Navy closer to adding more of these highly-advanced and powerful attack submarines to its fleet.
"Our ability to commit an additional £1.5 billion for boats five, six and seven underlines the benefits of a balanced budget and fully-funded equipment programme that gives our Armed Forces greater certainty.
"This funding demonstrates our commitment not only to a key Royal Navy capability, but also to the submarine industry in Barrow, which will play a vital role in Britain's defence for decades to come."
Rear Admiral Simon Lister, the MoD's director of submarines, said: "The Astute Class will become the jewel in the crown of the Royal Navy's Submarine Service and boasts much greater firepower and more advanced sonar and communications than ever before.
"These submarines represent a huge leap forward in technology and will operate all over the world with the Royal Navy.
"These boats provide the optimum capability a submarine can offer in land strike, strategic intelligence gathering, anti-submarine and surface ship warfare, and protection of the strategic deterrent."
BAE Systems Maritime submarines managing director John Hudson said: "This is a very significant milestone for the company as it provides increased stability for the remainder of the programme.
"The Astute class will deliver to the Royal Navy a fantastic attack submarine capability and both HMS Astute and Ambush are currently demonstrating this while on their sea trials.
"Audacious, and the rest of the submarines in the Astute class, will eventually complement those already at sea."
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