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

Japan clinched a landmark A$10 billion ($6.5 billion) deal on Tuesday to build Australia's next-generation warships, marking Tokyo's most consequential defence sale since ending a military export ban in 2014 in a step away from its postwar pacifism.

The Australian government has chosen Japan as a partner to jointly develop a new frigate for the Australian navy.