Agamemnon will be the sixth of seven nuclear-powered attack submarines designed and manufactured at BAE’s site in Barrow-in-Furness, Cumbria.
Will Blamey, managing director of BAE Systems Submarines, said: "Securing the contract for the sixth Astute class submarine is a significant milestone for BAE Systems and the result of many years of hard work by our highly skilled workforce.
"The Astute class submarines are amongst the most highly capable and technologically advanced in the world and we’re immensely proud to build them for the Royal Navy.”
With a top speed of 30 knots and 7,400 tonne displacement, the 97m long Astute class submarines are the Royal Navy’s next generation of attack submarines. Armed with spearfish torpedos and tomahawk cruise missiles, the nuclear powered submarines are claimed to be the stealthiest of their type.
The first three Astute class submarines - HMS Astute, HMS Ambush and HMS Artful - are in service with the Royal Navy.
As well as acting as prime contractor on the Astute program, BAE Systems is also the industrial lead for the Dreadnought programme, the Royal Navy's next generation of submarines that will carry nuclear weapons.
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Where will all the raw materials come from for the manufacturing process? How will they be transported to the factory and what is going to be done with the various scrap and residues?