As part of the agreement, eight new missile vessels will be built, with two of those constructed in the UK, according to the Ukrainian Navy.
The UK will also assist in building naval bases around the Azov Sea and the Black Sea regions.
Minister for Defence Procurement Jeremy Quin and Ukraine's Deputy Minister of Defense, Oleksandr Myroniuk signed the agreement on HMS Defender in Odessa, a city located on the Black Sea in southern Ukraine.
In signing the memoranda, both nations agreed to implement the Ukrainian naval capabilities enhancement programme, with Babcock as the prime industrial partner.
While the first two of the missile boats, made to meet the requirements of the Ukrainian Navy, will be built in the UK, the other six will be constructed in Ukraine.
The Ukrainian Navy added that the two Sandown-class vessels will be upgraded before they receive them.
In the Royal Navy, the ships are minehunters, deploying around the world as part of Mine Counter Measures 1 Squadron, being part of NATO exercises and clearing old ordnance from the UK coast.
During the signing of the deal, Rear Admiral Oleksii Neizhpapa, Commander of the Armed Forces of Ukraine met with the UK's First Sea Lord, Admiral Tony Radakin.
The pair discussed both the security situation in the Azov-Black Sea region and issues of ongoing and further cooperation.
This latest collaboration comes after the Memorandum of Intent was signed by Defence Secretary Ben Wallace and Ukraine's Defence Minister Andrii Taran on board HMS Prince of Wales in October last year.
Cover image: HMS Shoreham, a Sandown-class minehunter, off the coast of Bahrain while deployed on Op KIPION (Picture: MOD).