Russia's war in Ukraine has jolted NATO to strengthen its eastern flank and ramp up spending, and US President-elect Donald Trump has demanded alliance members increase defence expenditure to five percent of GDP.

The transatlantic alliance's current minimum level for defence spending is two percent, but some members already spend more.

Poland, which led the pack on 4.12 percent last year, plans to spend 4.7 percent of its annual economic output on defence in 2025.

Lithuania will spend between three and four percent on defence this year.

"We have agreed to allocate between five and six percent of gross domestic product to defence each year between 2026 and 2030," President Gitanas Nauseda told reporters after a state security council meeting.

The parliament will have to approve the budget each year.

Foreign Minister Kestutis Budrys said regarding the announcement that "difficult times require bold decisions and leadership".

"We call on our allies to follow this lead. The era of passive 'sit-and-wait' strategies is over," he added on X.

The EU and NATO member state of 2.8 million people is one of Ukraine's staunchest supporters, and fears it could be next in Russia's crosshairs if Moscow were to win its war against Kyiv.

"The likelihood of Russian military aggression remains real, but it is not inevitable. We need to significantly step up our efforts to strengthen our defence and deterrence," Nauseda said.

"Our security is also assured by our membership of the NATO alliance, but it will only be effective if we are prepared to defend ourselves," he added.

Lithuania hopes the defence budget increase will allow it to develop a military division, which requires the country to buy tanks and tracked infantry fighting vehicles.

It has already signed an agreement to buy 44 German Leopard tanks and is in negotiations to procure CV90 machines from Sweden.