The two allies announced they would spend the money developing next-generation ties at a French-Anglo summit in France, the first deal of its type since the tragic Paris attacks that took place in November last year.
Each side is to contribute near £750m.
"The UK and France are proud allies. Our meeting here in Amiens is an opportunity to discuss how we can work even more closely together to keep our people safe," the Prime Minister said.
"I am convinced that the UK's membership of the EU gives us greater security and greater capacity to project power globally.
"In an ever-more uncertain world, we gain from our membership of these international organisations," he added.
The project is to build a prototype of the next generation of unmanned drone aircraft, which can conduct surveillance and fire missiles.
Britain's BAE Systems and Rolls-Royce, along with Dassault Aviation, Safran and Thales of France, are taking part, according to Reuters.
The agreement comes as French economy minister Emmanuel Macron said that if the UK votes to Brexit the Calais migrant camp could be moved to the UK.
He said that if the UK votes for Brexit, France could drop the Le Touquet agreement it has with the UK that allows the UK to carry out border controls on the French side of the Channel.