A Dutch company has been chosen to build a new ferry to service Fogo Island and Change Islands in Newfoundland.

Transportation and Works Minister Nick McGrath made the announcement in St. John's on Wednesday morning.

McGrath said Damen Shipyards, based in The Netherlands, will deliver the new 80-metre vessel by September 2015.

The contract is worth $51 million.

The new ferry will be designed to sail in ice and carry up to 200 passengers. It will also have roll-on and roll-off capability for 60 vehicles.

It will replace the aging and oft-broken Captain Earl W. Winsor, which is currently in for repairs.

Fogo Mayor Andrew Shea says he would've preferred more capacity, but said the new vessel will solve some serious, recurring transportation issues in the area.

"I think this is going to eliminate our winter problem with vessels," he said. "You know, we've had a horrible winter here last year with the Captain Earl Winsor and the ice, and I think with maintenance and things like that we get a few years of no maintenance, you know, no problems."

Also Wednesday, the provincial government announced plans to purchase another 80-metre ferry for the Bell Island-Portugal Cove run.

It will also be built by Damen Shipyards, but the finer details of that contract have yet to be finalized.

new ferry-2013-11-13

This is the design for a new ferry to service Fogo Island and Change Islands. (CBC)

Nonetheless, the Bell Island ferry users committee called it a "momentous day."

"The opportunity and growth and renewed confidence in Bell Island and its economy from this decision will open doors for increased employment, tourism growth — building on our 45,000 annual visitors — and better access to the mainland for our commuter workers," said committee consultant Ed Kent.

McGrath said an additional $10 million will be spent on wharf improvements at Bell Island and Portugal Cove, to accommodate the new, larger ferry.

The government said it received 15 proposals for the ferry tenders, with Damen Shipyards ranking highest among all bidders.

McGrath said the Kiewit yard in Maystown was not one of them.