ANKARA, Turkey — Turkey is selling four locally made stealth corvettes to its littoral Black Sea neighbor Ukraine as part of a larger framework agreement to enhance bilateral cooperation in defense procurement.

The agreement, signed Dec. 15, also involves the transfer of Turkish technology to Ukraine and co-production of Turkish-made armed drones. It was signed by Ukrainian Defence Minister Andriy Taran and Turkey’s top defense procurement official, Ismail Demir.

The warship deal could be worth about $1 billion, a government source told Defense News on condition of anonymity.

In 2018, Turkish state-controlled defense technologies company STM won a contract to produce and sell four MILGEM corvettes to the Pakistan Navy. STM pledged to deliver the first small, multirole warship by the end of 2021. The contract entails construction of two corvettes in Turkey, with the other two slated for production at Pakistan’s Karachi Shipyard & Engineering Works.

One Turkish procurement official said that a similar production pattern may be applied to the Ukrainian contract.

Industry sources say STM may have to substitute some American-made parts in the MILGEM architecture with locally made components due to a recent U.S. decision to sanction Turkey’s procurement agency, the Presidency of Defense Industries.

The U.S. move came as part of the Countering America’s Adversaries Through Sanctions Act in response to a Turkish decision to procure and deploy the Russian-made S-400 air defense system. Turkey is the first NATO member state to deploy a Russian-made air defense system.