Electro Optic Systems' (ASX:EOS) EM Solutions has been given a $149.5M contract to provide communication upgrades to the Australian Navy as part of a project to modernise its communications.

The company said contract can be extended by up to $52.7M, and will see existing legacy hardware retired.

It also said the contract schedule extends for seven years from 2023 to scheduled final acceptance in 2030.

Shares of Electro Optic Systems reached $0.92 at 12:35pm AEST.