The deal with publicly-owned Great British Energy – Nuclear comes after a two-year selection process and will see the creation of a new development company to bring the reactors to market, pending final government approvals and contract signing.

The landmark decision is a big boost for BAM Nuttall, Laing O’Rourke and Atkins which are part of the Rolls-Royce-led consortium developing its SMR design.

Rolls-Royce SMR will build three SMR units in the UK, each generating enough electricity to power 1m homes.

At its peak, the project could support up to 3,000 construction jobs.  The first SMR is expected to be on the grid by the mid-2030s.

The move forms a key part of the government’s £2.5bn investment in the SMR programme under its Plan for Change strategy to drive clean energy growth.

The newly rebranded Great British Energy – Nuclear will allocate the first reactor site later this year. The eventual rollout, combined with Hinkley Point C and Sizewell C, is expected to deliver more nuclear power in the 2030s than in the last 50 years combined.

Energy secretary Ed Miliband said: “We are ending the no-nuclear status quo and are entering a golden age of nuclear with the biggest building programme in a generation.”

440MW commercial reactor design

Rolls-Royce SMRs are expected to be faster and cheaper to deliver than traditional plants, with a production-line approach aimed at cutting costs and attracting private investment.

The global market for SMRs could hit £500bn by 2050, putting the UK in prime position to export expertise and technology developed under this first wave of construction.