Defence firm RBSL will produce more than 260 Boxer military vehicles at its Hadley Park site as part of the subcontract awarded by Rheinmetall Landsysteme for the Ministry of Defence's infantry vehicle programme.
The company says the contract will "create and sustain" more than 200 skilled jobs in and around Telford, with the complete programme employing 1,000 people nationwide.
However it is not yet known how many of the 200 jobs will be new roles and how many will be filled by existing staff.
RBSL will also use the contract to provide work and training opportunities to more than 60 apprentices over the next five years, which is anticipated to be replicated across the UK supply chain.
The subcontract marks a significant milestone for the programme, following the £2.3 billion MIV contract awarded to ARTEC, the Rheinmetall and KMW consortium in December 2019.
The MIV programme aims to source 60 per cent, by value, of the contract from within the UK. In order to achieve this, RBSL is part of the MIV Joint Procurement Team, which has engaged with suppliers in England, Wales, Scotland and Northern Ireland.
RBSL is also making a £20m investment in its Telford site to improve infrastructure, provide state-of-the-art manufacturing facilities, and deliver some of the highest standards of training for specialist capabilities, such as welding.
Defence Minister Jeremy Quin said: “Investment in defence is an investment into British industry and this Boxer contract will create and sustain thousands of skilled jobs throughout the country over its lifetime.
"Defence contracts like this at RBSL in Telford will modernise and upgrade our armed forces whilst helping the nation build back better from the Covid-19 pandemic.”
Dr Marco Nöding, RBSL managing director, added: “RBSL’s subcontract is a great step forward after months of hard work. Working with Rheinmetall and other partners, RBSL is bringing new skills and technologies into the business and the UK supply chain.
“I feel proud that RBSL has the opportunity to support British industry by working with UK-based suppliers – especially given the extraordinary circumstances the UK faces as a result of Covid-19.
"The next step for us is to formalise our community of suppliers and ensure the British Army receives their new vehicles manufactured to the highest standards.”