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Johannesburg - Armscor awarded a multi-billion rand contract to Denel for the production of 200 armoured military vehicles, the parties said on Monday.
"The 8x8 Badger is a best-of-breed vehicle in its class and will contribute to the modernisation of the SA National Defence Force," they said in a statement.
"The recent involvement of South African troops in the Democratic Republic of the Congo has again emphasised the need for protective mobility on the battlefield, which the Badger now provides."
Defence secretary Sam Gulube said the production order represented a significant chapter in the SANDF's history.
"It provides a much-needed capability for troops involved in critical peace keeping operations in other African countries."
Denel chief executive Riaz Saloojee said the contract was the most significant one signed with a South African company in the last 10 years.
"[It]... demonstrates government's and the SANDF's confidence in the ability of the local industry to provide frontline equipment."
Armscor acting chief executive Sipho Mkwanazi said the Badger would have significant benefits for the SANDF.
"We have set stringent conditions for ensuring local content and supplier development. The production of the Badger is expected to create about 2 000 jobs during its production period."
Armscor concluded a contract with Denel in 2007 for the development of a new generation infantry combat vehicle.
The initial development of the vehicle platform was done by Finnish contractor, Patria, but manufacturing of the production units would happen in South Africa.
