The big shake-up will see the MoD’s property arm try to get more specialist and smaller contractors directly on board.

And the department’s delivery teams will be rationalised as four of the existing prime contract regions are merged into two to deliver savings.

The Next Generation Estates Contract programme will run for 10 years and has been shaped after taking advice from leading UK clients.

In future Defence Estates will run just four regional prime contracts which will be limited to routine maintenance and occasionally small works up to £3.9m.

Most construction work will  be let through new Core Frameworks of pre-approved suppliers for major new-build projects that are likely to be divided regionally.

Defence Estates is now working on the detail of the individual contracts to meet a tight timetable where expressions of interest for the Next Generation Estates Contract can be sought in the Autumn.

Contracts will be awarded to successful bidders in a phased series of announcements between late 2011 and 2014.

If there is enough work in the pipeline the MoD’s property arm also plans to set up special Functional Frameworks to handle Single Living Accommodation (SLA) and airfield pavements works.

Housing maintenance services will now be provided through a single National Housing Prime.

Approval of the shake-up follows from a review of best practice across a host of clients over the last 18 months.

Research included consultation with Shell UK and National Grid. The estate procurement team has also drawn on earlier work with  Sainsbury’s, M&S, Morrisons, EDF Energy, and BP.

A spokesman for Defence Estates said: “The underpinning principle is for companies across industry, irrespective of size or geographical location, to be involved in the NGEC programme and considered as potential supply chain partners.

“The programme has built on lessons learnt and best practice across Government and industry, to develop the future commercial arrangements for the provision of estate maintenance, refurbishment and new-build accommodation while obtaining the best possible value for money.”

From 2013 the current contracts to provide management, maintenance and development of the UK Defence estate expire.

These includes the £427m prime contract for Scotland, won by Turner Estates, the £700m contract for the south west awarded to Bovis Lend Lease and Babcock, and Interserve’s PriDE consortium’s £500m contract for the south-east.