The Chancellor has said the Government will add £11bn to the defence budget over the next five years – £6bn more than was promised by Prime Minister Rishi Sunak on Monday.
Jeremy Hunt said: "Today, following representations from our persuasive Defence Secretary, I confirm that we will add a total of £11bn to our defence budget over the next five years and it will be nearly 2.25% of GDP by 2025.
"We were the first large European country to commit to 2% of GDP for defence and will raise that to 2.5% as soon as fiscal and economic circumstances allow."
On Monday, the Prime Minister promised an extra £5bn for the military over two years, to give the UK's Armed Forces the funding needed for a "more volatile world" in the face of the growing challenges posed by China and Russia.
Mr Hunt's announcement is in line with the figure that Defence Secretary Ben Wallace, was understood to have wanted as he had earlier reportedly argued for £11bn funding for his department' as military budgets were squeezed by the impact of Vladimir Putin's invasion of Ukraine and high inflation.
Mr Hunt also set out £33m funding for Britain's military veterans over the next three years, going towards extra housing and specialist care for physical injuries.
He said the Government would provide the package to increase the capacity of the Office for Veterans' Affairs, noting this would "support veterans with injuries returning from their service and increase the availability of veteran housing".
According to a Cabinet readout, issued before the Chancellor got to his feet in the Commons, Prime Minister Rishi Sunak pointed to the "breadth of work" by the Government in recent days, in a pre-Budget Cabinet meeting.
In the readout, the Prime Minister "concluded Cabinet by highlighting the domestic and international announcements made in recent days" including new commitments on defence.
The readout said: "He said this was closely followed by the publication of the integrated review refresh, which was welcomed by many other countries and demonstrated the UK taking a lead on how democracies can meet the current global challenges.
"He said the next stage in the Aukus partnership announced on Monday was a demonstration of Global Britain in practice. The partnership will enhance both UK and global security, and the Prime Minister underlined that nothing like it has been achieved since the 1950s. It will also deliver thousands of jobs and growth in the UK including in Barrow-in-Furness and Derby."
However, Paul Johnson, director of the Institute for Fiscal Studies, in a post on Twitter following the budget announcement, suggested there was no timescale for the spending on defence, saying: "Defence spending to 2.5% of GDP, but only when fiscal and economic circumstances allow. So no timescale. But the ambition matters a lot for the rest of public spending.
"We'll no longer be funding a growing welfare state from falling or even stagnant defence spending."