The vessel is expected to start operations in 2020.
Norwegian Prime Minister Erna Solberg was present for the signing of the 250m NOK contract to build the Yara Birkeland with Norwegian shipbuilding group Vard.
"A vessel like Yara Birkeland has never been built before, and we rely on teaming up with partners with an entrepreneurial mindset and cutting edge expertise,” said Svein Tore Holsether, President and CEO of Yara.
“VARD combines experience in customised ship building with leading innovation, and will deliver a game-changing vessel which will help us lower our emissions, and contribute to feeding the world while protecting the planet.”
The vessel, a collaboration between Yara, the engineering company Kongsberg, and Vard, has received some 133.6m NOK from the Norwegian government’s green investment fund Enova.
Geir Håøy, chief executive of Kongsberg, said the vessel was “an important next step for the entire maritime industry”.
“The Norwegian maritime cluster has taken a leading position within technology, design, legislation, testing and all other aspects of the development,” he said.
The battery-driven ship will replace the 100 diesel truck journeys a day required to transport products from Yara’s fertiliser plant in the Norwegian city of Porsgrunn to ports in Brevik and Larvik, cutting emissions of NOx and CO2 and reducing the risk of road accidents.
It is fitted with radar, sensors, cameras and a global positioning systen which will allow it to leave Porsgrunn, navigate around other boat traffic, and travel the 60km down to the port.
The ship will initially be controlled by a crew based in a temporary bridge stationed in one of the 100 containers on board, but Yara hopes to move the container onshore after a short period, and then control the vessel remotely.
Kongsberg has been betting heavily in autonomous shipping, in July agreeing to buy Rolls-Royce Commercial Marine, its biggest competitor in the segment.