A MASSIVE jobs boost is coming to Ipswich. 

The Federal Government has awarded a much anticipated defence contract to build 211 CRV new vehicles to company Rheinmetall which has committed to setting up its manufacturing centre in Ipswich. 

The $80 million centre will produce 200 of the 211 LAND 400 phase 2 vehicles.

The company beat out its Victorian competitor BAE Systems Australia for the $5 billion job. 

The products manufactured in Ipswich would not only flow to the Australian Army but to other agencies around the world.

It means 350 new long-term jobs with lucrative export opportunities for existing businesses in Ipswich over the coming decades.

Overall, the contract could support more than 1000 new jobs. 

Prime Minister Malcolm Turnbull said the decision "was about Australia's security".

"This is about lethality and survivability," he said.

"This is about capability and protection.

"The Rheinmetall Boxer Combat reconnaissance vehicle brings that all together."

Mr Turnbull, speaking in Brisbane on Wednesday morning, said the project would ensure the nation had a fully integrated national sovereign defence industry.

"This is the largest single acquisition that has been made for the Australian Army and it is part of our $200 billion reequipment of the Australian Defence Force to ensure that the men who we send into harm's way have the capabilities to keep us safe in the 21st century," he said.

The decision over the contract has been highly anticipated with politicians urging the federal government to support Queensland's economy by awarding the contract to Rheinmetall. 

The LAND 400 program involves the supply of 211 combat reconnaissance vehicles as well as infantry fighting vehicles for global markets.

The new vehicles will replace the entire existing fleet.

The first vehicles will be built overseas to train staff in construction before the operation moves to Australia. 

A piece of land in the Redbank area has been earmarked as the site for the manufacturing centre. 

Mayor Andrew Antoniolli said the flow on affect could create up to 1000 jobs locally while offering new opportunities for existing businesses already involved in supplying the defence force.

Ipswich mayor Andrew Antoniolli said the opportunities for small to medium enterprises were "limitless".

"It could quite literally mean more than 1000 jobs in small to medium businesses," Cr Antoniolli said.

"The companies that directly supply Rheinmetall will benefit enormously.

"This is great news for Ipswich.

"We're already home to the largest defence base in Australia, so the city is perfectly positioned for this contract."

In September Rheinmetall toured the country showing off its Boxer CRV. 

During the visit Rheinmetall's managing director Gary Stewart said Ipswich would be the ideal location for its manufacturing 'Centre of Excellence' for a variety of reasons, including its proximity to Brisbane and access to the Amberley air base.

"When you look forward to when this equipment has to be deployed overseas in operations, the fact you have the C17 (Globemaster aircraft) strategic air lift right there, it's in the right location to be able to get this equipment where it needs to be quickly, so it makes sense in a lot of ways," Mr Stewart said at the time.

Rheinmetall is already the largest supplier of military vehicles to the Australian Defence Force, delivering more than 2500 logistics trucks to the Australian Army under a previous LAND 121 program, which are being deployed from Wacol now.