The UK is spending $500m (£400m) on a stake in failed satellite firm OneWeb as part of a plan to replace use of the EU's Galileo sat-nav system.
OneWeb went bankrupt in March while trying to build a spacecraft network to deliver broadband.
The UK is part of a consortium with India's Bharti Global which won a bidding war for the company.
Business Secretary Alok Sharma said it would help deliver the "first UK sovereign space capability".
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In a statement, Mr Sharma said: "This deal underlines the scale of Britain's ambitions on the global stage.
"Our access to a global fleet of satellites has the potential to connect millions of people worldwide to broadband, many for the first time, and the deal presents the opportunity to further develop our strong advanced manufacturing base right here in the UK."
The consortium involving the UK government was the highest bidder in an auction for the bankrupt company.