Oakdale Business Park will be the project base

The deal worth �1.7bn is the biggest ever defence contract awarded in Wales.

It will result in the creation of 500 jobs in south east Wales which has been badly hit by manufacturing redundancies in recent months.

General Dynamics is building a new headquarters at the Oakdale site where development and manufacturing of the "Bowman" radio system will take place.

Hundreds of army vehicles will be used to deliver state-of-the-art digital equipment for installation.

The MOD conducted its recent system designs review at the project's temporary headquarters at the Aiwa plant in nearby Newbridge where 150 people have already been recruited.

The deal was originally confirmed by Defence Secretary Geoff Hoon in July 2001.

The army's existing radios are more than 20 years old and are said to be unreliable and insecure.

The MoD began considering replacements two decades ago, but it took a radical review of army procurement to ensure the situation has been speeded up.

The replacement will use the latest digital technology and will provide a significant economic boost for south Wales.