A £3.7 billion contract has been signed to build the first three ships in a new fleet of Navy frigates.
Work on the Type 26 global combat ships will start at BAE Systems' yards on the River Clyde in Glasgow this summer, securing 1,700 jobs in Scotland and a further 1,700 in the supply chain across the UK, the Ministry of Defence (MoD) said.
A total of eight ships are to be built in the fleet, with the contract for the second batch of five ships to be negotiated in the early 2020s.
Plans to build the new frigates were set out in the Government's 2015 strategic defence and security review, although the project has been scaled back from earlier proposals to construct 13 ships.
Fears over the future of the Glasgow yards were raised last year when the Type 26 work was delayed but Defence Secretary Sir Michael Fallon visited the site in November to commit to the programme.
The ships will specialise in anti-submarine warfare and work closely with the Navy's Trident nuclear deterrent and the new aircraft carriers, the first of which - HMS Queen Elizabeth - launched from Rosyth last week for sea trials.
The fleet will eventually replace the current Type 23 frigates and each ship will carry a crew of 118.
Described as "the most advanced anti-submarine warfare ship in its class around the world", the MoD is said to be exploring export opportunities where there is "strong interest from international customers".
Sir Michael said the Type 26 programme will secure the long-term future of the Scottish shipbuilding industry.
"The Type 26 Frigate is a cutting-edge warship, combining the expertise of the British shipbuilding industry with the excellence of the Royal Navy," the Defence Secretary said.
"We will cut steel on the first ship later this month - a hugely significant milestone that delivers on our commitment to maintain our global naval power.
"These ships will be a force to be reckoned with, there to protect our powerful new carriers and helping keep British interests safe across the world.
"Backed by a rising defence budget and a £178 billion equipment plan, the Type 26 programme will bring vast economic benefits to Scotland and the wider UK."
The MoD said the contract is structured to "motivate both sides to deliver to a successful outcome where both parties share in the pain and gain in the delivery of the programme".
Sir Michael added: "The contract is structured to ensure value for taxpayers' money and, importantly, now designed to protect them from extra bills from project overrun.
"The investment will secure hundreds of skilled jobs at BAE Systems on the Clyde for the next twenty years and thousands of jobs in the supply chain across Britain. "
Ross Murdoch GMB national officer and interim CSEU chairman, said: "It is fantastic news that the defence secretary has finally confirmed and signed the contract for the first batch of Type 26 Frigates.
"Whilst we understand that it was always going to be announced in batches we look forward to future confirmation on the other five ships.
"It is a particularly significant announcement in terms of the timing given the Queen Elizabeth Carrier going out from Rosyth last week to commence sea trials, as it once again reinforces the world class reputation of our UK shipyard workers.
"This is tremendous news for GMB members in Scotland in particular, but also in the wider context of the supply chain across the UK."
Ian Waddell, national officer with trade union Unite, said: "We welcome the long awaited news that the Type 26 programme has been given the go ahead. These first three ships will secure thousands of highly skilled jobs on the Clyde and across the UK supply chain.
"The contract is testament to the world class skills of the BAE Systems workforce on the Clyde and we urge the Government to sign on the dotted line for the next five ships as soon as possible."
Douglas Chapman MP, the SNP's defence procurement spokesman, said: ''This is very long-awaited and long-promised contract, and it is welcome news for the skilled workforces at Scotstoun and Govan and others in the supply chain.
''The MoD must now make good the commitment that the next batch of five vessels will be built on the Clyde and it's a great pity the UK Government has not offered the workforce and apprentices on the Clyde greater security for their future beyond 2020."
Nia Griffith MP, Labour's shadow defence secretary, said: "I welcome today's news and the many jobs that have been secured in Scotland and across the United Kingdom.
"But this is not the drumbeat of orders that the industry needs and the Government must now urgently come up with a national shipbuilding strategy to secure the long-term future of UK shipbuilding."