JERUSALEM, March 21 (Xinhua) -- Israel on Wednesday finalized the deal for its sixth German-made submarine, which it believes will boost the capabilities of the Israel Defense Forces (IDF), local media reported.

Israel purchased the Dolphin-class submarine at 530 million U.S. dollars, while Germany announced that it will subsidize one-third of the total price.

The signing of the contract took place in Berlin between Israeli Defense Minister Ehud Barak and German State Secretary at the Ministry of Defense Wolf Rudiger.

The diesel-electric powered sub, the biggest that has been made by Germany since World War II, will enhance Israel's naval capacity, the Ha'aretz newspaper reported.

The new sub is equipped with state-of-the-art systems and can launch missiles with nuclear warheads.

Israel currently deploys three diesel-powered Dolphin-class submarines, which entered service in the early 1990s and are reportedly capable of launching nuclear warhead-tipped cruise missiles. The subs were built by Germany's leading shipbuilder Howaldtswerke-Deutsche Werft (HDW).

Another two submarines, whose construction began at HDW's Kiel dockyard in 2006, are scheduled to be delivered to Israel in the next two years. According to foreign reports, they are also configured to be able to carry nuclear weapons.