The contract is worth nearly a quarter of the Russian state arms exporters entire sales last year, which were put at $7.4bn.

Mr Putin said the deal had been signed on Friday during a visit by the Libyan defence minister.

There was no immediate word from the Libyan side on the deal.

Libya will buy 1.3-billion-euro ($1.8 billion) worth of arms from Russia under a new contract, Prime Minister Vladimir Putin said Saturday. "Its not only for small arms and light weapons," he said. He added that the contract was signed on Friday. Russian media reports previously said $2 billion contracts for the delivery of Russian fighter jets and air-defense systems to Libya would be signed during the January 26-27 visit to Moscow by the countrys defense minister, Maj. Gen. Younis Jaber. Russias state arms exporter Rosoboronexport earlier said Russia had five ongoing military contracts with Libya, including "military equipment for its ground forces and the navy, the modernization of T-72 tanks and spare parts supplies." Other media reports said Russia was looking to sell up to 15 Su fighters and Yak-130 trainer planes to Libya.

The Russian prime minister did not specify the type of arms or military equipment involved in the deal.

But a Russian diplomatic source told Interfax on Tuesday, however, that Libya wanted to acquire 20 fighter planes, at least two S-300 air defence systems, several dozen T-90C tanks and other arms.

Moscow and the North African state enjoyed close ties during the Cold War, and much of Libyas arsenal was purchased from the Soviet Union in its last years.

Moscow and Tripoli have stepped up their contacts in recent years.

In 2008, Libyan leader Muammar Gaddafi visited the Russian capital in his first visit to Moscow since the 1980s.