The agreement provides for the final assembly of the transporters at the WZM Siemianowice Slaskie weapons factory, in southern Poland, Deputy Defence Minister Janusz Zemke was quoted as saying by the PAP news agency.

The purchase, to be paid from the defence ministry budget, involves 400 combat vehicles equipped with 33mm guns and 290 logistical vehicles.

The first nine carriers will be provided in 2004 and the others successively up to 2013, allowing Poland to equip two battalions a year.

Zemke said that the Finnish company had agreed to invest 170 percent of the cost of the contract in Poland, under a compensatory investment programme which will be signed by mid-May.

The military equipment deal is the latest move to bring ex-communist Poland up to the standards of the transatlantic military alliance NATO, which it joined in 1999. The upgrade is costing billions of dollars.

On Friday Poland is expected to sign a 3.5-billion-dollar sales contract for 48 US Lockheed Martin F16 fighter planes, sealing eastern Europe's biggest defence procurement deal yet.

SPACE.WIRE