The United States has approved the $3.5 billion sale of Israel’s Arrow-3 missile defense system to Germany, and the deal will be Israel’s largest ever defense deal, Israel’s Defense Ministry announced today.

Israel and Germany will sign a Letter of Commitment, with an initial payment of $600 million, to begin work on this program, the statement said, adding that the full contract will be ready for signature by the end of 2023.

The US is a partner in the Arrow program, which was jointly developed by the Israel Missile Defense Organization and the United States Missile Defense Agency.

Russia’s war in Ukraine has highlighted the lack in many Western countries of ground-based air defense systems, such as Raytheon’s Patriot units or the more recently developed IRIS-T system.

While the Patriot and IRIS-T systems cover the middle level of air defense, the Arrow-3, produced by Israel Aerospace Industries and Boeing Co, offers protection at the highest level.

The Arrow-3 uses a detachable warhead that collides with the target and is designed to intercept ballistic missiles outside the Earth’s atmosphere at a height that allows any unconventional warhead to be safely destroyed.

Germany has said it expects its Air Force to receive the Arrow-3s by the fourth quarter of 2025.

The radio station of the Israeli armed forces reported that the signing ceremony with Germany of the contract for the sale of the Arrow-3 is expected to take place in November.