Cormer Defense will create 80 jobs at a new facility in Miramichi to retrofit military vehicles.
The New Brunswick government has agreed to provide $5.2 million over the next decade in the form of conditional contributions, forgivable loans and payroll rebates.
The Atlantic Canada Opportunities Agency also put federal money into the project.
Premier David Alward said in a statement the investment fits in with the provincial government’s desire to grow the aerospace sector.
"The Miramichi's world-class skilled workforce has made this region a destination for global industrial leaders, and I am pleased that Cormer Defense has chosen to grow in Miramichi and New Brunswick," Alward said in a statement.
Cormer Defense is a part of Cormer Group Industries, which has its head office in Winnipeg. The company has been working in the global defence industry since 1989.
The company's website says it has 160 employees.
Leo Sousa, the president of Cormer, said he was pleased to work with ACOA and the New Brunswick government to bring the new facility to New Brunswick.
"We also look forward to working with the cluster of businesses that already support aerospace and defence in this region, the people of CFB Gagetown as well as the good people of the City of Miramichi," Sousa said in a statement.
ACOA Minister Bernard Valcourt, who is also the associate minister of national defence, said the federal government is investing $1 million in a repayable contribution to the Cormer project.
"Our investment will help Cormer Group Industries establish a state-of-the-art operation in Miramichi and contribute to the aerospace and defence sector in New Brunswick. This project will bring significant economic benefits to this region, and will help create jobs and wealth for the greater Miramichi area," Valcourt said in a statement.