A £350 million contract to upgrade one of the Royal Navy's nuclear missile submarines, safeguarding up to 2,000 jobs over the next three years, will be announced by the Defence Secretary today.

Philip Hammond will unveil the deal with defence firm Babcock to refit and refuel HMS Vengeance during a visit to Devonport Dockyard in Plymouth, where the work will be carried out.

The MoD said the work on the Vanguard Class submarine will secure more than 1,000 jobs at Babcock, a further 300 at other firms in Plymouth and another 700 jobs in the industrial supply chain across the UK.

Mr Hammond will tell a press conference: "As well as securing 2,000 UK jobs, this contract will ensure the nuclear deterrent submarine fleet can continue to operate safely and effectively to maintain a continuous at sea deterrent.

"As we stabilise the defence budget we are increasingly able to commit to equipment projects to safeguard the UK's National Security.

"Devonport Dockyard is at the heart of maintaining and supporting the Royal Navy and I am pleased that such a large number of jobs will be protected.

"Our White Paper published earlier this year said we would support key sovereign capabilities in British companies that help us to protect our national security and this contract with Babcock is evidence of that commitment."

It will be the last time one of the Vanguard submarines will be refuelled. A new reactor core - the energy source that powers the 15,000 tonne vessel - will also be fitted that will last her until she is decommissioned.

The MoD said it would also include a complete overhaul of equipment on the submarine, the installation of improved missile launch equipment and upgraded computer systems.

Rear Admiral Simon Lister, director of submarines for the MoD, said: "This contract marks the final phase of what has proved to be a very successful programme of refuelling our fleet of nuclear submarines.

"The highly sophisticated nature of the work involved in the deep maintenance of these magnificent vessels is testament to the experience and skills of the workforce here in Devonport and those in the supply chain across the UK."

But there has been criticism over what has been perceived locally as a delay in signing the deal.

HMS Vengeance arrived at Devonport Naval Base on March 2 and has been tied up at the base since.

Alison Seabeck, the Labour MP for Plymouth Moor View, said the contract was "good news for Plymouth" but that there had been some "concern" among local workers after the submarine arrived without a signed contract for the refit.

"Vengeance, rather unusually, has been left sitting in dock in Plymouth waiting for the sign-off from the Secretary of State," she said.

"There was no obvious reason why, given refits are planned years in advance, that there should be a delay. I am given to understand there was further negotiation going on between Babcock and the MoD.

"I don't think it is a good way to do business and I will be interested to hear what the Secretary of State has to say when he is at Babcock."