Australia and Japan signed Saturday a contract worth AU$10 billion (US$7 billion) to supply Australia with warships, marking Tokyo’s largest military deal since lifting its arms export ban in 2014.

Richard Marles, Australian Minister of Defence, said in a statement that he signed the contracts with his Japanese counterpart, Shinjiro Koizumi, affirming both governments’ commitment to the successful implementation of the warship delivery program.

“This is the fastest acquisition for the Royal Australian Navy in peacetime,” he declared.

Under the agreement, Mitsubishi Heavy Industries of Japan will supply the Royal Australian Navy with three upgraded multi-mission frigates, which will be built in Japan starting in 2029, while eight additional frigates will be constructed in Australia.

The fleet of 11 naval vessels will replace Australia’s ageing fleet of ANZAC-class ships. Australia is striving to expand its fleet to 26 warships over the next decade.

For its part, the Japanese Ministry of Defence stated on X that Koizumi and Marles welcomed the signing of the multi-mission frigate contracts and confirmed the strengthening of bilateral defence relations between the two countries.

This deal comes as Australia recently announced its intention to raise its defence spending to 3% of GDP by 2033, compared to about 2% currently.

The deal is part of a wider military build up by Canberra aimed at boosting its long-range firepower to deter China.

Mitsubishi Heavy Industries’ Mogami-class frigate won the deal over rival Germany’s MEKO A-200 from Thyssenkrupp Marine Systems. Japan’s government lobbied heavily for the deal after missing out on Australia’s submarines contract to a French company in 2016.

Australian news outlets reported that the German company’s bid had emphasized their vessel’s cheaper price and their greater experience building ships abroad. But Pat Conroy, Australia’s Minister for Defence Industry, said the Mogami-class frigate was a “clear winner” when assessed by “cost, capability and meeting our schedule of delivery.”