The new UK passport to be issued after Brexit will be made in France, the current British manufacturer has said.
The burgundy passport, in use since 1988, will revert to its original blue and gold colour from October 2019.
The boss of UK supplier De La Rue said it would appeal against the decision to award the £490m contract to Franco-Dutch firm Gemalto.
The Home Office said a winning bid had been chosen but it was up to the supplier to announce the news.
De la Rue's shares closed nearly 6% lower on Thursday.
Pro-Brexit former cabinet minister Priti Patel said the decision to hand the new contract to a foreign firm was "disgraceful" and "perverse".
The Liberal Democrats' Brexit spokesman, Tom Brake, said the "blue passport saga" was becoming a farce.
"First it was established that we did not have to leave the EU to have blue passports. Now we learn that the passports will be printed by a foreign company."
Under EU procurement rules, the Home Office had been required to throw open the bidding process to European firms.
However, it added that passports did not have to be made in the UK and 20% of blank passport books are currently produced in Europe.
It also said the new deal could save the taxpayer £100m-£120m and that 70 new jobs would be created in the UK, at sites in Fareham and Heywood in Lancashire.
Gemalto, which has its headquarters in Paris and has a factory in Fareham, said it was aware of the reports regarding the contract to produce the new UK passport.
But it added: "As the process is still ongoing and the terms of engagement are confidential, we cannot make any further comment on it at this stage."
A spokeswoman for the Home Office said: "The chosen company demonstrated that they will be best able to meet the needs of our passport service with a high quality and secure product at the best value for money for our customers and the taxpayer."
Earlier, De La Rue boss Martin Sutherland told the BBC's Today programme: "Over the last few months we have heard ministers happy to come on the media and talk about the new blue passport and the fact that it is an icon of British identity.
"But now this icon of British identity is going to be manufactured in France."
He added: "I'd like to ask Theresa May or Amber Rudd to come to my factory and explain to our dedicated workforce why this is a sensible decision to offshore the manufacture of a British icon."
De La Rue, which has held the contract to manufacture British passports since 2009, said it had been "undercut on price" by Gemalto.
Mr Sutherland said it was unclear whether jobs at the firm's Gateshead factory would be affected. De la Rue employed more than 600 staff at the site last year.
The company issued a profit warning on Tuesday, which triggered a sharp fall in its share price.
The UK passport is an expression of our independence and sovereignty – symbolising our citizenship of a proud, great nation. That's why we have announced that the iconic #bluepassport will return after we leave the European Union in 2019. https://t.co/pgQvrBIna5— Theresa May (@theresa_may) December 22, 2017
Existing passport holders will continue to use their existing burgundy passports until they expire.
The Home Office issues more than six million passports annually and is the only provider of passports to British citizens.