Defence technology firm QinetiQ signed the 11-year contract with the Ministry of Defence yesterday.
The renewal of the Naval Combat System Integration Support Service contract means the Portsdown Hill-based firm will continue to develop and test key Royal Navy systems.
And the move has secured the future of about 280 jobs based in Portsdown Technology Park.
In comes after the company revealed a worrying 14.4 per cent slump in its pre-tax profits to £90.2m in May.
QinetiQ, which also advises Nato, said the latest deal will be accompanied by a surge of investment to expand and modernise the facility.
Harriett Baldwin, defence procurement minister, said the contract was ‘great news’ for jobs in the area.
‘With a rising defence budget we are ensuring that our armed forces have the equipment and support they need to keep the UK safe and secure,’ she said.
For more than 45 years, the Portsmouth base has developed combat and communications equipment and software for all navy warships ahead of them being deployed, including BAE Systems’ Artisan surveillance radar and MBDA’s Sea Ceptor missile.
Penny Mordaunt, Portsmouth North MP, welcomed the latest deal, which she said was crucial for the city’s future economy.
She said: ‘Portsmouth has become the maritime heart of the UK; a giant business park for marine innovation, research and development.
‘QinetiQ is at the core of that and it’s great it now has this stability to keep investing locally.’
QinetiQ has been behind a range of breakthroughs in defence kit and invented the night-vision goggles.
Steve Wadey, QinetiQ chief executive, said: ‘This contract is recognition of Portsdown as an asset of critical national importance, relied upon by the navy to guarantee the safety and effectiveness of its fleet.
‘It is excellent news for QinetiQ and its partners, which together support over 280 local jobs.’
Neal Lawson, director ships support at the MoD’s defence, equipment and support HQ added: ‘Portsdown Technology Park will remain a unique and vital centre of excellence for the UK.’
In 2013, Portsmouth was rocked when defence giant BAE Systems axed nearly 1,000 shipbuilding jobs in the city. There had been hopes composites company Magma Structures would move into the shiphall but this deal collapsed in March.
Two months later BAE reopened part of the shiphall as a new world-class maintenance hub for the navy’s fleet of minehunters, securing key engineering jobs in the city.