Aermacchi M-346. Photo: wiki commons.

30 Italian M-346  training jets will be purchased by the Israeli Air Force to replace the existing fleet of American Skyhawks, putting an end to a military contract battle between South Korea and Italy.

“This huge deal with the Italian government will enable us to replace the Skyhawk jets which have served the training apparatus of the IAF for 40 years,” said Udi Shani of the Israeli Defense Ministry.

“This offset deal is extremely important due to the current harsh budgetary reality in which the defense establishment is operating.”

In return for the $1 billion Israeli purchase of Italian aircraft, manufactured by Alenia Aermacchi, the Italian government agreed to buy up $1 billion worth of Israeli made defense equipment.

Alenia Aermacchi is a subsidiary of  Finmeccanica, the Italian aerospace giant.

The announcement coincides with the Singapore Air Show, the largest aerospace event in Asia which is being held this week.  Israeli and South Korean officials were reported to have met at the show, but in a statement released by the Israeli defense ministry, the Italian jets are “preferable in terms of the IAF’s needs and requirements,.”

Flight Global points out that due to the M-346 using Honeywell engines, the deal will allow Israel to use U.S. foreign military financing.