MELBOURNE, Australia — Australia and Canada signed a $1.75 billion export agreement on Monday to build an Australian-designed long-range radar system in Canada.

Australian Defense Minister Richard Marles and Canadian Secretary of State (Defense Procurement) Stephen Fuhr signed the first phase of a pact to provide early warning radar coverage from the Canada-United States border into the Arctic.

“What this really means is that Australia and Canada are now partners in terms of the future development of the Over-the-Horizon Radar,” Marles told reporters at the Australian Parliament House in the capital Canberra.

“There is now a very strategic dimension to the relationship,” Marles added.

Fuhr said the two British Commonwealth countries, both of which are partners in the Five Eyes intelligence-sharing alliance that also includes the United States, Britain and New Zealand, had “stood shoulder-to-shoulder for generations.”

“As the world adjusts to its new strategic and economic realities, I can’t think of a stronger partner to work with more than Australia,” Fuhr said at a joint press conference with Marles.

Canadian Prime Minister Mark Carney announced he’d chosen Australia’s radar system over comparable U.S. technology shortly after he came to power last year.

In March, Carney became the first Canadian prime minister to visit Australia in 12 years.

During the visit, Carney and his Australian counterpart Anthony Albanese agreed to increase cooperation on defense technologies, artificial intelligence and critical minerals.

BAE Systems Australia said in a statement it will support both governments in developing the Arctic Over-the-Horizon Radar.

The Australian system, developed over 40 years, works by refracting high-frequency electromagnetic waves off the ionosphere to detect distant objects that are invisible to conventional radars because of Earth’s curvature.

The deal is Australia’s largest ever defense export. Australia’s previous record defense export was a $700 million deal signed in 2024 to provide Germany with 100 Australian-made Boxer heavy weapon carrier vehicles.