Canada wants to buy 12 new submarines and has chosen ThyssenKrupp Marine Systems (TKMS).
"I am pleased to announce that Canada has selected TKMS as the preferred supplier for the Canadian patrol submarine project," said Carney before flying to the NATO summit in Turkey.
It is one of the country's largest military procurements to date and is worth several billion dollars.
South Korea's Hanwha Ocean had also submitted a bid. There were no American bids, as the US only builds nuclear-powered submarines, while Canada wants diesel-electric propulsion.
Following the badly soured relationship with US President Donald Trump, the Canadian government is also trying to strengthen its defence cooperation with European NATO allies.
