CANBERRA, June 29 (Xinhua) -- A British organization has been selected to implement Australia's largest peace-time warship building program, which will see nine states of the art frigates developed in South Australia.

BAE Systems, which had to compete with both Spanish and Italian designs, won the rights to produce the warships under a 25.7 billion U.S. dollars contract with the Australian Federal Government, finalized on Friday morning.

BAE Systems' Hunter class Type 26 ships, which will provide the "Australian Defence Force with the highest levels of lethality and deterrence," were set to commence construction in Adelaide in 2020, and will be operational by 2030.

Australia's Prime Minister Malcolm Turnbull said the deal will create an "ecosystem based on engineering and advanced technology" at the Osborne facility, slightly west of Adelaide's CBD.

"This city will be one of the great naval shipbuilding cities in the world and it is my determination to build a sovereign shipbuilding industry in this country," Turnbull told the Australian Broadcasting Corporation on Friday morning.

"This is a great national enterprise. This is going to be a continuous shipbuilding program that creates 5,000 jobs directly, and another 10,000 indirectly through the national supply chain.

"It is my commitment and determination to build a sovereign shipbuilding industry in Australia that will build ships not just for Australia, but for export as well."

Australian Submarine Corporation (ASC) Shipbuilding, a government-owned organization, will become a subsidiary of BAE Systems for the duration of the project.

At the end of the program, Australia will retake complete ownership of ASC Shipbuilding, which meant future intellectual property regarding the Type 26 warships will remain in the country.

The Hunter class frigates will eventually replace Australia's current Anzac class ships, which have been operational since 1996.