VT Group, one of Hampshire’s most iconic companies, has finally ended its near 150-year link with the shipbuilding industry by finalising a deal to sell its naval interests to BAE Systems.

The long-anticipated agreement to sell its 45 per cent holding in BVT Surface Fleet naval shipbuilding for £346m brings down the curtain on a glorious history that has seen the firm make more than 100 Royal Navy destroyers and the world water speed record holding Bluebird II.

The Hedge End-based business, which has roots stretching back to 1864, merged its Portsmouth shipbuilding interests with those of fellow Hampshire defence firm BAE Systems last year.

It created the BVT joint venture, which BVT employs more than 7,000 people, including more than 1,000 in Hampshire, and generates turnover of £1 billion a year. It has been involved in the building of new aircraft carriers for the MoD and the new Type 45 destroyer.

The former Vosper Thornycroft business, which was formerly based on the banks of the Itchen in Woolston, Southampton, has agreed to dispose of its 45 per cent holding in BVT Surface Fleet naval shipbuilding for £346m. The move will allow it to focus on its services businesses, covering defence, communications and education and skills.

VT and BAE merged their shipbuilding operations last year but VT always had the right to sell its stake or, after a certain period of time, BAE could buy it.

VT is also injecting £43m into BVT in order to cover certain export contracts, while a side deal will see VT buy BAE’s share in its Flagship training business for £70m.

VT chief executive Paul Lester said the disposal provided a major boost to the company’s balance sheet.

He added: “This completes the final step of our exit from our shipbuilding and related activities.”