The additional £16.5 billion (€18.4 billion) will put the UK second in defence spending among NATO allies after the United States.
UK Prime Minister Boris Johnson has announced a huge funding boost for the Ministry of Defence.
It is being touted as the biggest investment programme in the country's armed forces since the end of the Cold War.
The Conservative party leader made the announcement via video link to UK MPs on Thursday as he continues his self-isolation after coming into contact with someone who subsequently tested positive for COVID-19.
"For decades British governments have trimmed and cheesepared our defence budget," he said. "I refuse to vindicate any pessimistic forecasts by picking up the scalpel yet again."
He said the armed forces will receive an additional £16.5 billion (€18.4 billion) above the government's current plans.
This will raise the country spending to 2.2 per cent of its GDP and put the UK second in defence investment among NATO allies after the US.
Johnson said the injection to military spending will "restore Britain's position as the foremost naval power in Europe".
There will be a range of different vessels built that will "spur a renaissance of British shipbuilding across the UK ... guaranteeing jobs and illuminating the benefits of the union in the welder's torch," he added.
The announcement comes amid growing concerns in recent months that the government is looking at ways to trim its commitments to overseas aid, partly because public finances have been strained by the costs associated with the coronavirus pandemic.
Johnson said now is the right time to press ahead with expanding British influence by harnessing emerging technologies.
The UK will invest in technologies that "will revolutionise military warfare," he said.
In terms of the terror threat in Europe, Johnson said choosing to "ignore the threat of terrorism and hope for the best" or just looking to protect the UK's borders and "curl up on our own island" are not options.
Johnson added that the plan would mean 10,000 new jobs per year, with 40,000 being created in total.
The opposition Labour leader Keir Starmer said he welcomed this additional funding and that Labour agrees it is time to end the "era of defeat", but blasted the Prime Minister's speech calling it nothing more than a "spending announcement without a strategy", adding it offered no clarity on the government's strategic priorities.
Starmer also questioned how the new investment would be paid for, whether through borrowing, tax rises, or taken from other budgets.
He reminded Johnson that the Conservatives had a "very clear manifesto commitment" to maintain overseas aid at 0.7 per cent, adding if this were to be cut it would "hugely weaken us on the global stage".
Defence Secretary Ben Wallace said the deal is “enough” for the armed forces to be modernised but refused to be drawn on whether some of the new money will come from the country's overseas aid budget.
“This means that we can have a proper discussion about what are our global ambitions and how are we going to fund it," he told Sky News.
“When I go abroad, what many countries want from us is our knowledge, our equipment and our understanding of how to provide security and how to provide defence," he said.
The government has come under fire recently for not spending enough on foreign aid, free school meals or furlough schemes for people affected by the pandemic, but Euronews correspondent Tadhg Enright says Johnson's plans have been backed by the opposition.
The move has also been welcomed in Washington which has long been calling for increased defence spending among its NATO allies.
Watch Tadhg's analysis for Euronews NOW in the player above.