The agreement includes a contract for the establishment of a training centre for the Hellenic Air Force by Israeli defence contractor Elbit Systems over a 22-year period.
Israel and Greece have signed their biggest-ever defence procurement deal, which Israel said would strengthen political and economic ties between the countries.
The agreement includes a $1.65bn contract for the establishment and operation of a training centre for the Hellenic Air Force by Israeli defence contractor Elbit Systems over a 22-year period, Israels defence ministry said.
The training centre will be modelled on Israels own flight academy and will be equipped with 10 M-346 training aircraft produced by Italian company Leonardo, the ministry said.
Elbit will supply kits to upgrade and operate Greeces T-6 aircraft and also provide training, simulators and logistical support.
Speaking about the deal, Israeli defence minister Benny Gantz, said: I am certain that (this programme) will upgrade the capabilities and strengthen the economies of Israel and Greece and thus the partnership between our two countries will deepen on the defence, economic and political levels.
The announcement follows a meeting in Cyprus on Friday between the UAE, Greek, Cypriot and Israeli foreign ministers, who agreed to deepen cooperation between their countries.
The Israeli and Greek air forces launched a joint exercise in Greece, the Israeli military said.
In at least one past exercise over Greece, Israeli fighter planes practised against an S-300 posted on Crete. The Russian-made air defence system is also deployed in Syria and Iran, Israels foes.
