South Korean shipbuilder Hanwha Ocean clinched a 1.1 trillion-won ($845 million) deal Friday to build a 3,600-ton submarine for the Navy, the state procurement agency said.

Hanwha Ocean signed the deal with the Defense Acquisition Program Administration (DAPA) to construct the third and last submarine under the Changbogo-III Batch-II program.

The company, formerly known as Daewoo Shipbuilding and Marine Engineering, has been building two other Changbogo-III class submarines since 2021.

It is the first submarine construction project the shipbuilder has won since it joined Hanwha Group in April.

The construction of the submarine is expected to be completed by 2029, with the deployment to the South Korean Navy expected in 2031 following two years of test-run, according to DAPA.

Batch-II submarines have increased in size and weight compared to the 3,000-ton class Dosan Ahn Chang-ho and ROKS Ahn Mu, which have been commissioned into active service.

They combine an air-independent propulsion (AIP) system with lithium-ion batteries to extend underwater operation time and reduce propulsion noise compared with diesel-electric submarines.

The envisioned submarines will be equipped with an advanced combat system with improved detection and targeting capability and the latest sonar system. (Yonhap)