German firm gets biggest defence contract in Australian history

Prime Minister Malcolm Turnbull while announcing the contract on Wednesday, said it was the single-largest acquisition in the Australian Army's history, with the purchase and maintenance of the vehicles to cost USD 12.1 billion.

"This is about lethality and survivability. This is about capability and protection," Xinhua quoted Turnbull as saying.

The vehicles will be built at a new facility in Ipswich, west of Brisbane, creating 1,450 jobs across Australia.

The federal government also considered a bid by the Britain's BAE Systems, which would have built the vehicles in Victoria, but Defence Minister Marise Payne said the chosen prototypes had been through rigorous testing.

The vehicles will have a 30-year life and will be equipped for peacekeeping and high-threat operations, the Australian Defence Force said.

The opposition Australian Labor Party has accused the government of choosing Rheinmetall's bid to appease voters in marginal electorates in Queensland, a suggestion dismissed by Defence Industry Minister Chris Pyne.