Germany is to sell two destroyers to Israel for one billion euros ($1.3 billion), the Bild daily reported Saturday.
The torpedo-carrying war vessels will be used to protect Israeli pipelines, the paper said, without citing a source.
The report added that Israel's national security adviser, Yossi Cohen, was in Berlin last week.
A German government spokeswoman reached by AFP confirmed Cohen's visit but declined to elaborate.
The deal comes amid growing tensions with Lebanon over oil and natural gas deposits in the Mediterranean.
In the past, Lebanon has attempted to claim at least part of Israel's Tamar and Leviathan fields as its own, claiming that parts of the fields are over the international maritime border, in Lebanese waters. Lebanon has also made similar claims on gas off the shores of Cyprus.
In September a Globes report revealed the Lebanese government has been encroaching on Israel's exclusive economic zone (EEZ), publishing tenders for offshore oil and gas exploration licenses for areas inside Israeli territorial waters.