AT least 1,200 jobs have been safeguarded in Portsmouth after the Ministry of Defence gave the green light for the Royal Navy's new supercarriers.
Portsmouth will be the home to the force's largest-ever vessels after Defence Minister Baroness Taylor announced the 3.9bn contract in London today.
It allows VT and BAE systems to set up a joint venture called BVT Surface Fleet Limited, which will build HMS Queen Elizabeth and HMS Prince of Wales.
At 65,000 tons each they are three times the size of the Navy's existing carriers.
Defence Committee member and Portsmouth South MP Mike Hancock said: 'This is fantastic news and has guaranteed Portsmouth's shipbuilding future for a generation.
'This will mean years and years of work, which will attract fresh talent to the city and send out a message that we are the centre of the Navy.
'It has been an anxious time for the local industry waiting for this commitment.'
VT recently increased its workforce by 200 to 1,200 to work on export contracts, and those jobs will now be saved for at least five years.
While work will be shared around the UK, the bulk will be done at Portsmouth and in Scotland.
VT Group chairman Michael Jeffries said in March that as soon as the aircraft carriers contract was announced, the merger would be implemented.
A company statement said: 'VT and BAE Systems will now finalise arrangements for the joint venture combining their shipbuilding and naval support businesses, following the framework agreement signed in July 2007.
'VT and BAE expect the JV transaction documentation to be signed shortly and the agreement will then be subject to VT shareholder approval.'
Defence Secretary Des Browne said: 'I am delighted that we are moving closer to signing the contracts for the manufacture of the carriers.'
The Ark Royal will go out of service in 2012.
The first of the new carriers is not due in service until 2014 at the earliest, leaving the Royal Navy with only one carrier for at least two years. The other British carrier, Illustrious, will go out of service in 2015.