The Czech Republic will pay 13.7 billion Czech crowns (540 million euros, $630 million) for the system made by Israeli state-run company Rafael.

The purchase comes as part of the Czech Republic's drive to upgrade its military equipment -- and further boost ties with Israel, already a close ally.

"Army experts chose Spyder as the most suitable system after assessing nine systems," Czech Defence Minister Lubomir Metnar said in a statement.

"With it, the Czech Republic is getting the most cutting-edge technology tested in combat, moreover with a full guarantee from the State of Israel based on an intergovernmental agreement," he added.

Czech companies will supply goods and services amounting to 38 percent of the contract's value.

"It is a strategic agreement with a NATO-member country, which will create job opportunities in both countries," Israeli Defence Minister Benny Gantz said in a statement.

Rafael Chief Executive Yoav Har-Even hailed the deal as his company's "first air defence agreement with a NATO country".

"The agreement also includes a maintenance contract for the next two decades as well as local production -- two trends that Rafael has been increasing in recent years," he added.

Metnar said earlier the purchase was a step towards getting rid of a Soviet-made system from the 1970s which "does not correspond to current air defence standards".

The Czech Republic joined NATO in 1999, 10 years after former Czechoslovakia shed the totalitarian Communist regime that had been in power for four decades.

burs-frj/mas/pbr