Germany plans to deliver two submarines to Israel, a German Defense Ministry spokesman said Wednesday.
German shipyard HDW signed a contract with Israeli authorities on July 6 to build the two submarines, the spokesman said on customary condition of anonymity.
The spokesman said the German government will finance about one-third of the construction cost, which has been estimated at $1.3 billion.
He provided no further details.
Israel's navy already has three Dolphin-class vessels delivered by HDW in 1999 and 2000, which are capable of carrying nuclear missiles.
Word of the deal first surfaced in November, when two German magazines reported that Berlin had agreed to sell Israel two submarines at a discounted rate.
Israel - which has neither confirmed nor denied reports that it possesses nuclear arms - has been expanding its military arsenal in light of Iran's nuclear program.
Iran insists it is developing only nuclear power plants, but Israel and the U.S. suspect its program is designed to produce nuclear weapons.
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