Strategically located between East Africa and Southeast Asia, Diego Garcia serves as a surveillance centre for the Middle East. It was critical to air operations during the wars in Iraq and Afghanistan.

Washington said the deal protected the long-term, secure and effective operation of the strategic military base.

The U.K. has agreed to hand sovereignty of the long-contested Chagos Islands, an archipelago of more than 60 islands in the Indian Ocean, to Mauritius, in a deal to secure the future of a strategically important U.

While the UK and US retain a key strategic military base in the Indian Ocean, the two governments remain apprehensive over the security of the island.

Britain on Thursday said it would give up sovereignty of a remote Indian Ocean archipelago to Mauritius but will maintain there a strategic military base that it shares with the United States, in what US President Joe Biden described as a "historic agreement".