A new £870 million advanced radar deal will help to bolster dozens of aerospace jobs in Lancashire.
Defence chiefs have awarded the major contract, for RAF Typhoons, to BAE Systems and Scottish aerospace outfit Leonardo UK.
Fighter jets will be fitted with the European Common Radar System Mk 2, enabling aircraft to better counter emerging enemy threats.
Government sources say the announcement will support around 120 jobs at BAE's Samlesbury and Warton sites - alongside Leonardo posts in Edinburgh and Luton.
The development follows another significant boost in April, which saw the Lancashire aerospace giant awarded a £656m contract to continue to develop Tempest, the nation's future air fighter initiative, intended to replace the Typhoon in the 2030s.
Last year the government confirmed, at the Royal International Air Tattoo, it was committed to a £2.35 billion investment to equip Typhoons with several upgrades for Typhoon.
Defence officials say this is the first contract allocated from that major and complex investment, with the radar allowing aircraft to simultaneously detect, identify, and track multiple targets in the air and on the ground.
The Mk2 systen will be fitted to RAF Typhoon Tranche 3 aircraft and offered to other nations which operate the aircraft, hopefully boosting UK defence exports.
Defence procurement minister James Cartlidge said: "The RAF Typhoon is one of the most mission ready and capable aircraft anywhere in the world helping protect our skies at home and abroad.
"This £870m contract award is an investment in the future readiness and preparedness of our fighter jets, so we can continue to showcase our world-leading air capability."
The new system is designed to equip pilots with the ability to suppress enemy air defences using high-powered jamming and to engage targets while beyond the reach of threats.
A prototype is currently undergoing specialist testing at BAE Systems' site at Warton, ahead of initial flight testing in 2024.
Part of the deal will also see the delivery of a range of additional complementary upgrades to ensure Typhoons "will continue to remain a potent weapons capability and enable it to counter emerging threats until 2040 and beyond".
Group Capt Capt Matt D’Aubyn, Typhoon programme director said: "Typhoon is the backbone of UK Combat Air, capable of completing a wide range of air-to-air and air-to-surface missions.
"ECRS Mk2 will ensure Typhoon remains operationally effective in the future force mix in an ever increasing contested environment."
Andrea Thompson, BAE Europe and International air managing director, added: "The continued evolution of Typhoon as a world-class combat air platform ensures that the RAF maintains its advantage and protects the vibrant eco-system that supports our sovereign combat air capability in the UK, through sustaining and evolving the technical skills that are central to the UK’s future combat air strategy."
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