A new ferry serving the route between the Isle of Man and Lancashire will have "considerably more passenger space", the operator has said.
The passenger and freight vessel is expected to be in service in spring 2023, Isle of Man Steam Packet Company chief executive Mark Woodward said.
He said the ship, which will be built in South Korea, would be more "manoeuvrable in poor conditions".
It will replace the Ben-my-Chree, which will be kept as a back-up ship.
Mr Woodward said "following lengthy discussions" with Hyundai Mipo Dockyard, a contract had been signed on Friday.
"It is expected the new vessel will be slightly larger than the Ben-my-Chree in most respects, but with considerably more passenger space," he said.
"It is also intended to be more environmentally efficient and manoeuvrable in poor conditions."
The cost has not yet been confirmed, although the ferry operator previously said replacing both the Ben-my-Chree, which sails to Heysham, and the Manannan, which serves its Liverpool route, would cost at least £70m.
Although government-owned, the company will fund the new vessel itself.
A spokesman for passenger watchdog TravelWatch Isle of Man said while the "improved passenger provision" was welcome, the three-year wait for the new vessel would mean "we are all going to have to be patient".
Construction is due to start in summer 2021.
Source: BBC