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A South Korean defence contractor has been awarded a multibillion-dollar contract to supply Australia with a fleet of infantry fighting vehicles.

Defence Industry Minister Pat Conroy confirmed on Thursday morning the government’s selection of Hanwha’s “Redback” IFV over German company Rheinmetall’s “Lynx” design.

Chief of Army, Lieutenant General Simon Stuart said after two years of “extensive testing” the Redbank design found to be the “best option” for the defence force.

The contract, worth between $5bn and $7bn, has been the subject of a five-year tender process that began under previous prime minister Scott Morrison.

Earlier this year, the government slashed the number of IFVs planned for the LAND 400 Phase 3 program from 450 to just 129 following a recommendation from Defence Strategic Review to cut costs.

Under the program, Hanwha plans to build the fleet of Redback vehicles at a factory in Defence Minister Richard Marles’ Victorian electorate of Corio.

Mr Marles handed responsibility for the contract to Mr Conroy to avoid a conflict of interest.

The first IFVs are expected to be delivered in early 2027. The final vehicle will be handed to the army in later 2028.

Veterans Affairs Minister Matt Keogh described the announcement as one of the “biggest-ever” procurements for the army.

“The way in which we have approached this has been consistent with the Defence Strategic Review that we released a few months ago,” he told ABC News Breakfast.

“It’s been a very rigorous selection process that has been undertaken here.”

Former Victorian minister Martin Pakula tweeted his congratulations for the Victorian Defence Industry Advisory Council on its role in securing the winning contract for the state.

“Amazing news for Geelong, for Hanwha, for the ADF, for jobs and for all the people in the DJPR who worked so hard on this,” he tweeted.

The news is expected to come as a blow to Rheinmetall and Germany just two weeks after Prime Minister Anthony Albanese visited Berlin.

The announcement coincided with the 70th anniversary of the Korean War armistice.

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By Rahul

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