France said that Russia will buy 2 Mistral-class command and amphibious assault warships from a French-led consortium, with the possibility of 2 more.
The deal, which involves joint construction of the vessels, is the first sale to Russia of such naval high-tech by a NATO country. France's NATO allies, in particular the former Soviet Baltic States, have expressed alarm about arming Moscow with modern Western weaponry.
"Following the October 5 tender to supply the Russian navy with 2 projection and command ships, the Russian authorities have chosen the consortium of France's DCNS and STX and Russian naval yard OSK”, President Nicolas Sarkozy office said.
"Their offer initially covers the joint construction of 2 of this kind of vessel, which should be extended by the construction of 2 more.”
Russia's choice of the French warships came after French Prime Minister Francois Fillon said on a visit to Moscow earlier this month that France was ready to transfer military technology if it won the tender.
Russia had been in exclusive talks with France to buy 2 Mistrals but, in August, the Defense Ministry announced an international tender as the talks stalled on the question of technology transfer.
Russian Prime Minister Vladimir Putin had stressed that the price and the possibility of technology transfer to allow Russia to subsequently learn to build its own warships of the same class would be key criteria in its choice.
France began negotiations with Russia in 2009 on a possible deal to sell Moscow the Mistral, a powerful warship costing around 500 million euros (650 million dollars).
A Mistral-class ship can carry up to 16 helicopters, four landing craft, 13 battle tanks, around 100 other vehicles and a 450-strong force. It has facilities for a full command staff and is equipped with a 69-bed hospital.
Sarkozy’s office said the deal would lead to the creation of 1,000 jobs in French shipyards over 4 years.
The OSK naval yard said the Russians would be involved in "20% of the construction work of the first warship," adding that work on the vessel would start in 2011.