The order from the military, which is in the midst of an overhaul triggered by Russia's war in Ukraine, is for 155 mm rounds.

The commonly used rounds are crucial for Ukraine's outgunned forces, which have suffered battlefield setbacks against Moscow in recent times amid manpower and ammunition shortages.

"The main purpose of the order is to replenish the stocks held by the Bundeswehr and its allies, as well as to provide support to Ukraine in its defence campaign," said Rheinmetall in a statement.

Rheinmetall chief executive Armin Papperger hailed "the largest order in our company's recent history".

Deliveries will begin at the start of 2025.

As well as Ukraine, the Netherlands, Estonia and Denmark are participating in the order, the company said.

The contract will ensure enough work for a new factory that Rheinmetall is building in Lower Saxony state, northwestern Germany, the Duesseldorf-based company said.

Kyiv's European allies have struggled to produce enough ammunition to help Ukraine in its fight against Russia.

Rheinmetall has been racing to boost output, and by next year plans to produce up to 700,000 artillery shells a year -- about 10 times more than it manufactured before the Ukraine war.

The group has seen demand soar as countries rush to re-arm. As well as setting up a new host of factories, it said in March it was targeting a record 10 billion euros in sales this year.

It is desperately seeking to hire workers, and recently signed up to a scheme to employ staff from ailing German auto supplier Continental, which is slashing thousands of jobs.

sr/mfp/cw

RHEINMETALL

CONTINENTAL