The deal, worth pound1 billion ($1.3 billion) for 23 medium-lift support helicopters, will help secure thousands of jobs at Britain's last military helicopter manufacturing site in Yeovil, southwest England.

The future of the site, which employs roughly 3,000 people, was called into question after Leonardo signalled the prospect of closure if the contract did not go ahead.

The agreement comes just days ahead of the March 1 deadline for the contract being awarded.

The Unite union said the deal represented a "tremendous victory" for workers and the wider sector.

Leonardo was the only bidder left in the running for the much-delayed contract, after Airbus and Lockheed Martin both withdrew, according to press reports.

"We cannot subsidise Yeovil forever," without a government contract, Leonardo CEO Roberto Cingolani told investors on an earnings call in November.

"It's getting difficult for us to keep this big plant alive without institutional collaboration," he added.

NATO allies have committed to spend five percent of annual output on defence by 2035 as European members also faced pressure from US President Donald Trump to bolster defence spending.

UK Prime Minister Keir Starmer said last week that Britain needed to "go faster" in increasing military spending.

Leonardo's Yeovil site dates back to 1915.

The factory was originally built to manufacture aircraft to support the war effort during the First World War.