The value of the cash transaction, which is expected to be accretive to General Dynamics' earnings beginning in 2012, wasn't disclosed.
The transaction, which is subject to normal regulatory approvals, is expected to close in November, General Dynamics said.
Metro Machine Corp. is a privately held company that has been conducting Navy ship repair and conversions since 1972. Metro Machine Corp. is a prime contractor in Norfolk for multi-ship, multi-option contracts for combat and support ships for the Navy, including frigates dock landing ships and amphibious transport ships.
Metro Machine Corp. will become part of the shipbuilding and repair operations of General Dynamics NASSCO, a business unit of General Dynamics, which has headquarters in San Diego.
"With its Norfolk location, Metro Machine Corp. will extend the reach of NASSCO's ship-repair operations to a key East Coast naval port," said Fred Harris, president of General Dynamics NASSCO.
"This move will enhance General Dynamics' ability to deliver cost-effective maintenance and repair services to the U.S. Navy, helping the Navy to maximize the life of in-service ships and better serve the ship-repair needs of the entire U.S. fleet."