South Korea will sell mid-range surface-to-air missiles also known as the Cheongung II to the United Arab Emirates.
The two sides signed an MOU following talks on Sunday between President Moon Jae-in and Mohammed bin Rashid Al Maktoum UAE Prime Minister and ruler of Dubai.
President Moon is in the UAE for a working visit part of a week-long trip that will also take him to Saudi Arabia and Egypt.
Although the specifics have yet to be disclosed, the deal is expected to be worth around 3.5 billion U.S. dollars the largest in the country's defense history.
The UAE becomes the first importer of the missile which is designed to intercept hostile missiles below an altitude of 40 kilometers.
"President Moon said he was happy to ink MOUs on mid-to-long term defense cooperation and defense technology cooperation and the deal for Cheongung II went smoothly. He also called for continued efforts so it leads to reciprocal cooperation, like joint research and development, production within the UAE and joint entry into third markets."
President Moon also called for interest from the UAE for South Korea's efforts to host the Expo 2030 in the southern city of Busan and asked Dubai to share its successful experience of hosting the Expo 2020.
Before the talks. the South Korean leader visited the Expo to attend a ceremony for 'Korea Day' to promote the country's bid.
"The Dubai Expo gives South Korea, which is bidding to host the Expo 2030 in Busan, a lot of inspiration. Busan's theme is "Transforming our world, navigating toward a better future." It's along the same lines as the goal of the Dubai Expo. In 2030, (we) hope to meet in South Korea's marine capital Busan, to join the grand voyage of transforming the world.
Earlier on Sunday, President Moon attended a business roundtable on hydrogen cooperation as Seoul seeks to expand its horizon of energy cooperation with the oil-rich nation.
He said if the two sides work together they can create synergy given the UAE's potential to produce "blue hydrogen," which is derived from natural gas, and South Korea's ability to utilize it.
"If the UAE, which has strength in green and blue hydrogen, can join hands with South Korea, which is strong in terms of utilizing hydrogen, such as hydrogen cars, fueling stations and fuel cells, as well as storage and distribution, the two countries can lead the global hydrogen economy."
In fact, the UAE is the first partnership which South Korea has to import hydrogen produced overseas.
The UAE is taking proactive measures to achieve carbon neutrality by 2050 a goal shared by South Korea.
"President Moon's trip to the UAE is largely focused on gaining a stronger foothold in promising industries, such as defense and hydrogen energy in the Middle East region. On Monday, Moon will deliver a keynote speech on carbon neutrality and clean energy at the opening ceremony of the Abu Dhabi Sustainability Week. Kim Min-ji, Arirang News. Dubai."