Five new positions will be created at Lockheed Martin Australia's Williamtown base after it secured a $50 million deal with the Defence department.
The five-year contract is for ongoing sustainment of the Tactical Air Defence Radar System, which is used by the Royal Australian Air Force for air surveillance.
The news is a boost for the Hunter region, with Newcastle's unemployment rate hitting 10 per cent for the first time in 17 years last month.
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"This is a great example of the importance of partnerships between Defence and industry with the creation of additional highly skilled positions in what is a vibrant regional defence hub," Minister for Defence Industry Melissa Price said.
"The TADRS complements the Morrison Government's investment in Australia's surveillance and intelligence data collection and analysis capability. The importance of this capability was highlighted in the recently-released 2020 Force Posture Plan.
"With more than 90 per cent of the contract dedicated to Australian industry content, this project not only delivers new technology for a cutting edge Australian Defence Force but also represents an enormous opportunity for Australian industry."