(Bloomberg) -- Germany and Israel signed a formal commitment for Berlin’s purchase of the Arrow 3 air-defense system for about €4 billion ($4.2 billion), sealing the biggest military export deal in Israeli history.

German Defense Minister Boris Pistorius and his Israeli counterpart, Yoav Gallant, hailed the accord at a ceremony in Berlin Thursday, where they also signed a joint declaration on closer military cooperation.

“With the agreement on Arrow 3, Israel is making an important contribution to our security in Germany and our security in Europe,” Pistorius said at a joint news conference. The first Arrow systems would likely go into operation around the end of 2025, he added.

Gallant said it was an especially emotional moment for him as the son and grandson of Holocaust survivors.

“For us, it is easier to sell to Germany than others because we share the same values and interests in many areas,” he told reporters. “Therefore we are proud to be helpful to secure and protect German citizens and European citizens.”

The Arrow system — jointly developed by Israel Aerospace Industries and Boeing Co. — detects, tracks, intercepts and destroys tactical ballistic missiles over a wide area and is designed to safeguard strategic assets and population centers.

It’s set be an integral part of a German—led European anti-missile shield designed to expand protection for the continent. Some 19 countries have so far committed to the long-term project, which will establish a framework to intercept various kinds of missiles at different heights.

The Arrow deal strengthens Israel’s ties with Germany and NATO, while also underlining its partnership with its most important ally, the US, according to Yonatan Freeman, an expert in international relations at The Hebrew University of Jerusalem.

“With this agreement, Israel is agreeing that there is an increased potential threat by Russia on Europe,” Freeman said. “This is significant because it can potentially impact the Israeli-Russian relationship where Israel is trying to be neutral.”

(Updates with ministers’ comments starting in third paragraph)

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