Two hundred full time jobs will be created in Newcastle after Forgacs Engineering won a $400 million Federal Government defence contract.

Defence Minister Joel Fitzgibbon announced that Forgacs has jointly won the contract to help build Australia’s three new air warfare destroyers.

AMWU organiser in Newcastle, Melissa Pond said that the union had been lobbying the Federal Government for some time so that Newcastle could secure the contract and had arranged for Defence Minister, Joel Fitzgibbon, to come to Newcastle and have a look at the four Forgacs sites.

Forgacs, which specialises in ship maintenance and ship repair undertakes work on boats, ships, naval frigates and tug boats.

The contract is to build module blocks in Newcastle and then barge them to Brisbane for construction.

The project will inject $200 million into the region's economy and provide about 200 direct jobs.

Ms Pond said it was a great win for Newcastle.

“It’s just what we need. The downturn is starting to affect Newcastle and there have been some redundancies.

"This will give workers some job security and there’s also the flow-on effect that the contract creates. It will indirectly boost jobs because Forgacs has a dock at Newcastle and an engineering business that operates from Hexham and Carrington.”

Ms Pond said that one of the conditions of the contract is that apprenticeships and training have to be offered by the company.

“It’s great that we will also be able to secure some job opportunities for young people.”