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).

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.

The Australian government aims to sign binding, commercial contracts with Mitsubishi Heavy and the Japanese government in 2026.