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”.
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.
Matters will be clarified on 10 July, when the US Bankruptcy Court for the Southern District of New York rules on the sale.
If the Bharti Global-led option goes through, the UK government will own an equity stake of 45% in the new operation.
The UK government sees satellites as a way to meet commitments on the roll-out of super-fast broadband and believes OneWeb’s constellation could also deliver a precise Positioning, Navigation and Timing service, also known as sat-nav.
The latter has become a political imperative for No 10 since losing membership of Europe’s Galileo satellite-navigation system on departure from the EU in January.
Although Galileo’s free and open signals remain accessible to the UK, its more secure signals, known as PRS, intended for military and government agency use, are only available to member states. UK ministers want to replace this capacity with a home-grown system.