BAE Systems has developed a three-dimensional radar system that can track a target the size of a snooker ball from a range of more than 20km.
The navy will fit the new Artisan system to its two new aircraft carriers as well as Type23 frigates and other vessels under a £100m contract.
A spokesman said the system would help to identify threats sooner at a greater range than before by analysing the range and velocities of the tracked object.
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BAE Systems Insyte factory in Cowes will make the equipment.