Hitachi Ltd and the Japanese government have reached a deal worth around 1 trillion yen ($8.5 billion) to fund a UK nuclear power plant project, according to a government official.

The Japan Bank for International Cooperation and the Development Bank of Japan will provide financing for the project, the official told Reuters.

The funding plans are a boost for the project, one of several new nuclear plants planned in the UK, which wants to replacing its ageing fleet of atomic reactors.

Hitachi's Horizon unit plans to construct at least 5.4 gigawatts of new nuclear capacity across two sites in Britain.

The funds will be provided for the first plant planned at Wylfa Newydd in Wales.