Appledore Shipyard has won a £55m contract to refit former Royal Navy mine-hunting ship HMS Quorn.
Shipyard owners Harland and Wolff called it a "watershed moment" for the firm.
The work will support 100 jobs at the north Devon yard which was sold by Babcock in 2020.
The refit, which includes new engines, is being carried out on behalf of the Lithuanian government and navy which is expected to receive HMS Quorn in 2024.
HMS Quorn will also get new sonar systems, generators and its accommodation, hull and electrical systems will be refurbished in the project announced by the Ministry of Defence (MoD).
John Wood, chief executive officer of Harland & Wolff, said the firm was "thrilled" to have been awarded the contract.
"This is a watershed moment," he said.
"This contract has provided the breakthrough that we needed to activate the fifth and final element of our business strategy - the key market of defence."
He thanked the MoD "for the faith that they have placed in Harland & Wolff, and I look forward to working closely with them on the successful delivery of this contract".