The defence ministries of France and the UK have announced work on the £1.54bn future combat air system project (FCAS) and introduced a new unmanned combat air vehicle (UCAV).
The development follows the successful completion of a £120m joint feasibility study undertaken by the countries in 2014.
The FCAS project, which is aimed at developing the most advanced vehicle of its kind in Europe, is expected to benefit companies such as BAE Systems, Dassault Aviation, Thales France, Selex, Rolls-Royce and Safran.
Both the countries are expected start full scale development of prototypes in 2017.
Under the terms of the cooperation agreement, the French Ministry of Defence (MoD) has agreed to consider MBDA Brimstone guided missile to arm its fleet of Tiger attack helicopters.
Meanwhile, the UK will provide monthly strategic airlift to support French forces deployed in Africa.
UK Defence Secretary Michael Fallon said: "Brimstone missile would be a significant option for the upgrade of their Tiger attack helicopters.
"The sale of this British made precision weapon would deliver investment in the UK economy and help protect both our shared interests around the world."
Based on the AGM-114F Hellfire missile of the US Army, the advanced air-to-ground radar-guided Brimstone missile can effectively strike fixed and moving ground-based targets, with height accuracy.
Measuring 1.8m in length and 0.18m in diameter, the 50kg Brimstone missile is capable of destroying long-range targets with minimal collateral damage. It can be operated in all-weather conditions during day or night.
Image: David Cameron and Francois Hollande. Photo: © Crown copyright.