Britain and Germany will sign a defence agreement on Wednesday, the first of its kind between Europe's two biggest spenders on defence, which includes a commitment to develop new deep-strike weapons.

Under the pact, Rheinmetall has bagged a deal to produce artillery barrels in the U.K. from 2027, a move which will create 400 jobs, according to Britain's defense ministry, and greatly expand the company's presence in the U.K. arms market.

The two governments said they will coordinate more on defense, with British and German troops conducting joint military exercises on NATO’s eastern border.