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

The Mitsubishi Heavy Industries Group announced Tuesday that the Australian government has chosen it to build a new fleet of warships for the nation's navy.

Japan clinched a landmark A$10 billion ($6.5 billion) deal on Tuesday to build warships for Australia, marking Tokyo's most consequential defence sale since ending a military export ban in 2014 as it steps away from postwar pacifism to counter China.