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 has secured a landmark AU$10 billion (£4.9bn) agreement to build Australia's next generation of warships. It marks Tokyo 's most significant defence sale since ending a military export ban in 2014 and signalling a notable shift from its post-war pacifism.

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.