The Ministry of Defence (MOD) is investing £695m to provide in-service support to the RAF's fleet of Hawk T2 training aircraft and the Hawk T1 jets flown by the Red Arrows.
The investment will come over the next 11 years, with the Hawk T2s used to provide fast jet training for trainee pilots as part of the UK Military Flying Training System (UK MFTS) programme.
The UK MFTS provides the aircraft, synthetics and training devices for the next generation of aircrew for all three services.
Watch: From the air – Red Arrows' impressive 'Magnum Break' over RAF Scampton.
After graduating, the pilots will go on to fly F-35B Lightning and Typhoon fighter jets.
Defence Procurement Minister Jeremy Quin said the contract will maintain "pilot training and the Red Arrows long into the future".
"It underlines our commitment to providing the highest quality training and aircraft to the future pilots of our Armed Forces," he said.
The Hawk contract with BAE Systems is valued at £590m and will cover all Hawk T2 airframe support elements.
A separate £105m contract for engine support has been placed with Rolls-Royce.
Watch: Red Arrows salute 100 Squadron on RAF disbandment.
Air Vice Marshal Simon Ellard, Director Combat Air at DE&S, said the funding was "a major milestone for UK MFTS and the culmination of many months of hard work from the team at DE&S".
"Through this investment, we will continue to train our student pilots to become the best in the business," he said.
Group Captain Andy Turk, RAF Valley's station commander, said it "represents excellent news for Anglesey", as the contract will also support jobs in the North Wales region.
"The Hawk T2 is a fantastic platform to train our Typhoon and Lightning pilots on, readying them for the demands of the frontline; this level of ongoing investment ensures UK Defence will retain our military edge within the contested air environment," he added.