A contract worth more than $1 billion is expected to be signed by both nations later on Thursday, in a move which is likely to sustain hundreds of jobs at Rheinmetall's MILVEHCOE facility in Ipswich.

Details of the plan were first unveiled when Prime Minister Anthony Albanese visited Berlin last year, but its future was put in doubt after Australia awarded a more lucrative contract for Infantry Fighting Vehicles (IFVs) to a South Korean company instead of Germany's Rheinmetall.

At the time of the announcement, many figures inside the defence industry believed the deal would only survive if Germany's Rheinmetall was awarded the multi-billion-dollar LAND 400 Phase 3 project to construct IFVs in Australia.

Despite Germany's disappointment at missing out on the IFV project, the ABC has confirmed politicians in Berlin have overnight voted in favour of keeping the Australian export deal.

Under the export project more than 100 Boxer heavy weapon carriers will be assembled at MILVEHCOE using parts sourced from both Germany and Australia, with the completed vehicles then eventually sent back to Europe.

Labor has previously described the project as Australia's "single largest ever defence export deal" but some figures inside industry have contested the claim.

Australia is also currently producing its own fleet of over 200 Boxer Combat Reconnaissance Vehicles in Queensland for the army, with the first few vehicles constructed and tested in German facilities.

In September last year a "German-Australian letter of cooperation" was signed for the planned production of Boxer combat vehicles in Australia for the German Army's "Schwerer Waffenträger Infanterie" (heavy weapon carrier infantry) project.

"Following successful conclusion of negotiations, the German Boxer vehicles will be built, utilising production capacity at Rheinmetall's state-of-the-art Military Vehicle Centre of Excellence (MILVEHCOE) at Redbank in South-East Queensland," Rheinmetall noted at the time.

Original Story By | Andrew Greene