The strategy, running from 2016 to 2021, will be supported by a £1.9bn investment made in last year's Defence and Security Review. The amount is more than double the period covered by the previous strategy.
Three areas are identified by the strategy: defence, deter and develop.
Defence involves protecting critical national infrastructure in areas such as energy and transport, as well as Government websites, with automated techniques.
A "significant" chunk of the £1.9bn will go to the part of the "deter" strategy that covers "taking the fight to those who threaten Britain in cyberspace and relentlessly pursuing anyone who persists in attacking us".
Defence Minister Michael Fallon recently confirmed that the UK was using cyber weapons as part of the battle for Mosul against Islamic State. But the cyber security strategy goes one step further, promising that the UK will retaliate against cyberattacks.
Recent months have seen high profile hacks, including of the Democratic National Committee and the World Anti-Doping Agency. Both have been linked by US officials to Russia.
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A Russian group is also thought to be behind an attack which took TV5MONDE, a French TV station, off-air. GCHQ intervened to prevent an attack from the same hacking group in the UK, targeting the BBC, ITV, Channel 4 and Sky, in 2015.
The "develop" strand of the strategy involves developing talent among students and researchers, as well as researching new cyber security technologies.
Mr Hammond said: "Britain is already an acknowledged global leader in cyber security thanks to our investment of over £860m in the last parliament, but we must now keep up with the scale and pace of threats we face."
In 2015, the Government's National Security Strategy identified cyber security as a 'tier 1' risk to the UK, the same level of risk as terrorism and global instability.
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