The British arm of US-owned aerospace and defense giant General Dynamics is to build a new facility in South Wales after winning a 611 million US dollars service contract from Britain's Ministry of Defence (MOD).

Details of the new factory were announced by British Prime Minister David Cameron ahead of a visit Thursday to Wales.

He said the service contract would lead to 250 new highly-skilled jobs being created, describing the deal with General Dynamics UK as a credit to local skills and expertise.

The service contract follows the signing of a contract worth nearly 5.5 billion US dollars with General Dynamics last year to supply 589 newly designed armored fighting vehicles to meet the future needs of the British Army.

The new Scout Specialist Vehicle was designed for the army by General Dynamic engineers at the company's site at Oakdale on the Sirhowy Valley area of South Wales.

The new contract will extend the current in service support contract for the Scout Specialist Vehicles to 2024, delivering onshore technical engineering and maintenance from a site in South Wales.

The MOD said the new vehicles will give the army enhanced intelligence, surveillance, protection, target acquisition and reconnaissance capabilities, and it will be able to defend itself with a highly effective 40-millimetre cannon.

Local media in Wales Thursday speculated that the release of government-owned Ministry of Defence land in South Wales will be used to encourage the prestige car builder Aston Martin to build a new plant in the Vale of Glamorgan to build its new SUV model.

Aston Martin is said to be looking at Bridgend as a possible site to develop an electric or hybrid 4x4 car, the model launched in March at the Geneva International Motor Show, and said to be targeted at attracting "female, young and Asian drivers."

Cameron said to local media in Wales: "Here in Wales I think there is real potential to vacate Ministry of Defence land at St Athan and we're willing to make that available as part of efforts to persuade Aston Martin Lagonda to manufacture their new prestige SUV in the UK."