Sir Keir Starmer has approved an £18billion increase in defence spending as part of his fightback against Greater Manchester Mayor Andy Burnham.
The Prime Minister, who is battling to save his premiership, is hoping the investment will modernise the military and prepare the armed forces for a future conflict.
The spending increase is expected to receive the Prime Minister's approval as early as next week.
Sir Keir was forced to spend months battling with the Treasury over the commitment, although a Treasury source insisted it would be "fully affordable".
A Whitehall source, who described the £18billion boost as a "big win", told The Times: “We can’t keep saying we are going to do it and not bring the money in.”
Meanwhile, Mr Burnham wants to relax Rachel Reeves's "iron-clad" fiscal rules to increase spending.
“There’s certainly a case, when we look at the pressure on defence spending, to consider that exceptionally outside of the [fiscal] rules,” the Greater Manchester Mayor said in April.
However, No10 managed to win the battle with No11 after Sir Keir received a stark warning from his national security adviser, Jonathan Powell.
Sir Keir Starmer is expected to approve an £18billion defence boost
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Mr Powell warned the armed forces could not afford the jets, munitions and advanced technology needed to fight a future war.
He was supported in his push for an increase in spending by Cabinet Secretary Dame Antonia Romeo.
The £18billion package would see the Ministry of Defence fulfil the 62 recommendations made in the strategic review, including pushing ahead with the Global Combat Air Programme.
The commitment also builds on the Prime Minister's ambition to spend three per cent of GDP on defence in the next Parliament.
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Andy Burnham is hoping to get the keys to No10 | GETTYA Government spokesman said: “The defence investment plan will deliver the best kit and technology into the hands of our frontline forces at speed, while investing in and growing the UK economy.
"We are working to finalise the plan and it will be published as soon as possible."
Sir Keir is not expected to back down from a leadership challenge if Mr Burnham wins the upcoming Makerfield by-election.
The Prime Minister warned MPs against the “chaos and instability” of previous political upheavals.
Wes Streeting used to speak of Sir Keir Starmer 'in terms the devout reserve for the Messiah' says Nigel Nelson | PAHowever, Mr Burnham was given a clear path to challenge Sir Keir for the top job after Josh Simons resigned as the MP for Makerfield this week.
Mr Simons, who was seen as an ally to Sir Keir, won the Greater Manchester seat with a lead of 5,400 votes over Reform UK.
The seat is now expected to sit on a knife-edge, with Mr Burnham's candidacy potentially proving decisive.
Mr Burnham will put himself forward to contest the upcoming Makerfield by-election after being given the go-ahead by Labour's National Executive Committee.
Andy Burnham launched a short-lived bid to return to the House of Commons in February | PAThe NEC thwarted Mr Burnham's hopes of returning to Westminster in February, with Labour officials barring the Greater Manchester Mayor from standing in Gorton & Denton.
Wes Streeting, who resigned as Health Secretary this week, also threw his weight behind Mr Burnham's candidacy.
However, the Ilford North MP is still expected to mount his own leadership bid when enough Labour MPs trigger a contest.
Mr Streeting had been accused of bottling his attempt to topple Sir Keir, with critics suggesting the 43-year-old is short of the 81 MPs needed to take on the Prime Minister.