Australia says it has accepted a Japanese company's bid for a lucrative and hotly contested contract to build Australian naval vessels, expected to be worth 10 billion Australian dollars ($6.5 billion).

Australia selected Japan’s Mitsubishi Heavy Industries for a multi-billion dollar deal to build a fleet of advanced naval frigates, boosting Tokyo’s ambitions to become a major exporter of military equipment and develop its defense sector.

Japan’s Mitsubishi Heavy Industries will deliver the first of Australia's new navy frigates under a A$10 billion ($6.5 billion) deal, Australian Deputy Prime Minister Richard Marles said on Tuesday. T