The NATO Procurement Agency said the deal will see Germany, Netherlands, Romania and Spain acquire up to 1,000 Patriot Guidance Enhanced Missiles, or GEM-T.
"This contract demonstrates that NSPA, as a primary enabler of the alliance, can sucessfully deliver effective and cost-efficient multinational solutions to nations, while reinforcing European industrial capacities," NSPA General Manager Stacy Cummings said.
The contract, worth $5.5 billion, was given to COMLOG, a joint venture between Germany's MBDA defense company and U.S.-based weapons manufacture Raytheon.
"The contract will expand the European production of the missiles, enhancing supply and ensuring the replacement of Allied stockpiles," NATO said.
According to NATO, a new Patriot missile production facility will be set up in Germany as part of the project.
NATO Secretary General Jens Stoltenberg welcomed the "timely announcement" in a statement."
"This investment shows the strength of transatlantic defense cooperation and NATO's commitment to keeping our people safe," Stoltenberg said. "Russian missile and drone attacks on Ukrainian civilians, cities and towns show how important modern air defenses are. Scaling-up ammunition production is key for Ukraine's security and for ours."
The Ukrainian military has reported a high rate of success for its air defense system as Russia continues to launch massive strikes.
Over New Year's Eve, Russia unleashed about 90 drones against Ukrainian cities with the Ukrainian military saying it intercepted 87. A subsequent strike killed four people across Ukraine on Tuesday.
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