Planned to be commissioned in 2017, the wind farm will generate electricity to serve 450,000 households.

The facility will also help Denmark and the EU achieve CO2 emissions target by 2020.

MHI Vestas Offshore Wind CEO Jens Tommerup said: "We are looking forward to working together on realizing our firm belief of cost reduction in the offshore wind industry."

Vattenfall wind power head Gunnar Groebler said: "The concession agreement with the Danish government states that the wind farm should be operational by 1 January 2020 and today’s announcement combined with the soon to come geotechnical investigations on site and procurement of foundations and cables assures that Vattenfall stays on track towards this deadline."

Vattenfall, which owns a 60% stake of the Horns Rev 1 wind farm, is currently developing two other offshore wind farms, Dan Tysk and Sandbank, in the German part of the Nordic Sea, in partnership with Stadtwerke München.

The company owns around 1,800MW power projects, of which 1,000MW are offshore.

MHI Vestas Offshore Wind is a 50/50 joint venture of Mitsubishi Heavy Industries (MHI) and Vestas Wind Systems.