The US approved a $3.5 billion sale of Israel’s Arrow-3 missile defense system to Germany on Thursday, marking Israel’s largest-ever defense purchase, according to the Israeli Defense Ministry.

According to the announcement, Israel and Germany will sign a Letter of Commitment with a $600 million initial payment to begin work on the project, with the whole deal available to sign by the end of 2023.

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

Russia’s war in Ukraine has laid bare a shortage of ground-based air defence systems such as Raytheon’s (RTX.N) Patriot units or the more recently developed IRIS-T in many Western nations.

While Patriot and IRIS-T cover the medium layer of air defence, Arrow-3 – produced by Israel Aerospace Industries [RIC:RIC:ISRAI.UL] and Boeing Co (BA.N) – offers protection for the higher layer.

Using a detachable warhead that collides with the target, it is designed to intercept ballistic missiles outside the earth’s atmosphere, an altitude allowing for the safe dispersal of any non-conventional warheads.

Germany has said that it expected its air force to take delivery of Arrow-3 by the fourth quarter of 2025.

Israel’s Army Radio said the signing ceremony with Germany on the Arrow-3 sale was expected to take place in November.