BAE Systems is to continue developing the Type 26 Global Combat Ship for the Royal Navy under a new contract from Britain's Ministry of Defense.

The award, worth more than $680.4 million, is for 15 months starting in April and follows the government's commitment to buy eight of the advanced anti-submarine ships.

BAE Systems said the contract extends the current demonstration phase to further mature the detailed design of ships and to manufacture key equipment for the first three vessels.

"This is a significant investment in the program and an endorsement of the government's commitment to sustain this important national capability," BAE Systems' Type 26 Program Director Geoff Searle said. "The Type 26 program is progressing well and over the coming months more of our partners in the supply chain will start to manufacture equipment for the first three ships as we continue to progress towards the manufacturing phase.

A total of 27 companies are working with BAE Systems to deliver the Type 26 ships. Among them are Babcock for the ships' air weapons handling systems, GE Power Conversion for the electric propulsion motor and drive systems and Rolls-Royce for the ships' gas turbines.

With the new contract, BAE Systems expects to award manufacturing contracts to a total of about 50 companies.