ThyssenKrupp Marine Systems Canada, which has built similar ships for the German navy, will supply the design for two or three Royal Canadian Navy ships, winning out over BMT Fleet Technology.
Canada's two existing supply ships are nearly 45 years old, and urgently need to be replaced. The vessels are mainly used to supply warships with supplies to allow them to remain at sea longer.
The original plan from the navy was to have the new ships act as a floating supply base for both the navy and the army, acting as an offshore command post and hospital for humanitarian missions.
But the project got whittled down over time because of budgetary considerations.
In its description of the new design, National Defence and the Canadian Forces said Sunday that the ships would "provide a home base for maintenance and operation of helicopters, a limited sealift capability, and support to forces deployed ashore."
The Conservatives had put the supply ship replacement on hold in 2008, saying the bids on the table at the time were not compliant and were also too expensive.
Since then, the navy's design concept has been scaled back, causing some military observers to wonder whether the forces are getting the right ship.
But the delay is also expected to cost the government millions, potentially putting it back into the same price range as it was before they put things on hold.
The parliamentary budget officer warned earlier this year that the $2.6 billion set aside for two or three supply ships was too little, and the budget for the project should be $4.13 billion.
The Conservative government has refuted that estimate, saying it will be able to execute the replacements within its budget. It also emphasized Sunday that going with the existing German model of vessel will allow them to develop the ships with greater budgetary certainty.
The ships will be built by Vancouver Shipyards Co. Ltd. It's unclear whether the supply ships will be built first, or a new polar ice breaker.