NSW Premier Nathan Rees has welcomed the announcement that Newcastle company Forgacs Engineering has won a major defence shipbuilding contract.

The Navys air warfare destroyers project is worth a total of $8 billion and Forgacs Engineering has been selected to build parts of the hulls for each of the three ships.

This contract is great news for the Hunter, creating about 200 jobs and with Forgacs injecting more than $10 million in investment into the region, Mr Rees said.

The NSW Government is pleased to work with and support Forgacs to bring this project to NSW at least six companies across Australia were competing to build the hulls.

Forgacs and Newcastle have a long history of excellence in shipbuilding, providing the company and the region with the depth of skills and experience required for this sort of project.

"With this contract going to Newcastle, the regions capabilities in engineering and construction have been recognised, as well as the skills of the workforce.

Minister for State Development Ian Macdonald said Forgacs had a strong commitment to training.

Id like to congratulate Managing Director Stephen Forgacs and his team on this win. Its been a long and complex process to get this work, but one well worth pursuing, he said.

This news means that people in the Hunter will have new opportunities to secure good jobs and increase their own skills for the future."

Forgacs will be constructing one third of the blocks that fit together to make the hull of the destroyers.

The blocks, which fit together to make the hull, will be huge − the average size is about 15 metres by 12 metres by 9 metres and they each weigh 200 tonnes.

Each large and complex ship block will be completed to an advanced level and fitted with electrical wiring, piping and other components.

Stephen Forgacs thanked Minister Macdonald for the NSW Government's strong support and the assistance of the NSW Department of State and Regional Development.