Germany will spend up to $143 million of its federal budget to construct warships for Israel, Bild am Sonntag reported Sunday.
Israel will construct four warships worth $1.24 billion at the ThyssenKrupp Marine ship building plant in Kiel, the newspaper reported citing a confidential letter addressed to the German Budget Committee from the German Deputy Finance Minister Steffen Kampeter.
According to the letter, the Defense Ministry requires the funding to create "defense systems" for Israel.
Israel has previously raised a request with German government to finance the project partially, the report said.
Germany sent an advanced Dolphin-Class submarine to Israel as well as detonators worth 900,000 euros, according to the Spiegel last September.
The military equipment deliveries to the conflict areas have been long debated by the German lawmakers, with some arguing that aiding Israel does not contribute to the conflict settlement in the Middle East.