European missile manufacturer MBDA has secured a £250 million ($400 million) production contract for the Sea Ceptor naval air defense missile.

The weapon, which has been under development as the Common Anti-air Modular Missile (CAMM), is a variant of the AIM-132 Advanced Short Range Air-to-Air missile, which has been modernized and modified for sea-based air defense. The weapon will be initially installed on the Royal Navy’s Type 23 frigates starting in 2016, replacing the aging Seawolf missile. Later the system will be integrated onto the navy’s new Type 26 Global Combat Ship frigates currently under development by BAE Systems.

Sea Ceptor uses an active seeker, and a soft vertical launch to counter aerial threats. Once installed on the Type 26, it will become the ship’s primary air defense system.

MBDA say the production contract also will help build a “common stockpile” of the weapon, which also is envisaged as a future missile for a land-based surface-to-air missile system.

The company says the production line will be “optimized to supply the U.K. requirements” while also supporting potential overseas customers who wish to acquire the system.

Final assembly of the Sea Ceptor missiles will be done at MBDA’s Lostock manufacturing and assembly facility while nine U.K.-based first-tier subcontractors are located across sites in England and Scotland.

Sea Ceptor is likely to be the first recipient of a new Inertial Measurement Unit (IMU) that has been developed by MBDA and UTC Aerospace Systems for use across a range of missiles in a bid to reduce the cost per weapon. Until now different missiles have required their own dedicated design of IMU, which is a critical part of the weapon’s guidance, navigation and control functions.

Rather than using high-cost fiber-optics, UTC is using Micro-Electro-Mechanical Systems (MEMS)-based IMUs, which MBDA says are “smaller, more versatile, and offer unparalleled value for money” when compared to traditional technologies. The company believes the new IMUs are suitable for a number of key programs including the Sea Ceptor, the U.K.’s Selected Precision Effects at Range (Spear) III network-enabled stand-off air-to-ground weapon, and the Future Anti-Surface Guided Weapon (Heavy), which is the planned replacement for the Sea Skua anti-ship missile and will eventually equip the AgustaWestland AW159 Lynx Wildcat.