Italian aerospace and defence company Finmeccanica said it had signed contracts for about $850 million as part of a previous agreement between the Italian and Israeli governments.

In a statement, the state-owned group said the deal involved its aeronautics Alenia Aermacchi unit, as well as its satellite and defence electronics units Telespazio and SELEX Elsag.

"The deal... demonstrates that investments in technology represent for the group and for the Italian industrial system the right path to ensure a sustainable future that increases industrial capabilities, making them more competitive," Chairman and CEO Giuseppe Orsi said in the statement, Reuters reports.

As part of the deal, Alenia Aermacchi will supply 30 M-346 jet trainers to replace the A-4 Skyhawks currently in service with the Israeli air force with delivery of the first unit due mid-2014. Aleania's share of the contract is worth $600 million.