Defense company Elbit Systems also supplies products and systems to the hard-hit civil aviation industry.
The potential value of the Enhanced Night Vision Goggle binocular systems contract could reach $442 million.
The agreement includes maritime patrols by the Heron UAV, flight equipment and maintenance over four years.
Israel's Air Force has held its first joint exercise on German soil, while German soldiers have been training in Israel for the past 18 months.