The deal will see Britain pay Mauritius an undisclosed sum to keep control of the base but give up sovereignty of the rest of the overseas territory following a long–running row.
Sir Keir insisted the 99-year agreement would guarantee the undisputed status of Diego Garcia for the first time ever in a “steadfast duty to national and global securityâ€.
But former Defence Secretary Grant Shapps said: “This is absolutely appalling.
“Surrendering sovereignty here creates read across to other British bases. It’s a weak and deeply regrettable act from this government.”
All four Tory leadership candidates united in condemnation of the decision.
Robert Jenrick blasted the “dangerous capitulation that will hand our territory to an ally of Beijing.â€
Kemi Badenoch said it “weakens UK influenceâ€, Tom Tugendhat called it a “shameful retreat undermining our securityâ€, and James Cleverly railed: “Weak, weak, weakâ€.
However the former Foreign Secretary was accused by a rival camp of “some cheek†amid claims he wanted this deal when in government.
‘Surrender’ deal
Labour also blamed the last Tory government for their inheriting a “legal car crash†and claimed Diego Garcia would have been at risk without yesterday’s agreement.
Foreign Secretary David Lammy said: “This government inherited a situation where the long-term, secure operation of the Diego Garcia military base was under threat, with contested sovereignty and ongoing legal challenges.”
He also pointed to the blessing from outgoing US President Joe Biden.
It is understood Donald Trump was not informed but UK officials believe he will support the decision if elected to the White House.
Britain assumed control of the Chagos Islands in 1968 when it granted Mauritius its own independence.
Since then Mauritius has said it was illegally forced to give over sovereignty and has disputed Britain’s claim.
Sir Keir marked the deal in an agreement with the Prime Minister of Mauritius, Pravind Jugnauth, this morning.
A No10 spokesman said: “The leaders began by welcoming the political agreement achieved today between the UK and Mauritius on the exercise of sovereignty over the Chagos Archipelago after two years of negotiations.
“The Prime Minister reiterated the importance of reaching this deal to protect the continued operation of the UK/US military base on Diego Garcia.
“He underscored his steadfast duty to national and global security which underpinned the political agreement reached today.”
Britain assumed control of the Chagos Islands in 1968 when it granted Mauritius its own independence.
Since then Mauritius has said it was illegally forced to give over sovereignty and has disputed Britain’s claim.