The company said its subsidiary Electric Boat will be responsible for building 10 additional Virginia-class submarines as part of the agreement. It plans to build two ships per year for the next five years with the help of its partner Newport News Shipbuilding, a unit of Huntington Ingalls Industries.
Construction of the first submarine will begin May 1.
Electric Boat and Newport News Shipbuilding already have delivered 10 of these submarines to the Navy, and eight additional submarines are under construction.
In 2012, President Barack Obama's proposed budget called for only nine submarines, not 10, in the next block of Virginia-class ships.
U.S. Rep. Joe Courtney, a Democrat who represents eastern Connecticut, said the contract for the full 10 reflects the strength of arguments in favor of the strategic need for attack submarines, particularly after the loss of the USS Miami in a 2012 shipyard fire in Maine.
Electric Boat president Jeffrey S. Geiger said the award has great significance for the submarine industrial base.
"By continuing to produce two ships per year, the Navy and industry team retains the stability required to achieve increased efficiencies, providing the fleet with the submarines it needs to sustain the nation's undersea dominance," he said.
Shares of General Dynamics Corp., based in Falls Church, Va., closed at $107.39, down $1.62.
Shares of Huntington Ingalls, based in Newport News, Va., closed at $99.08, down $1.48.