The submarine deal involves the purchase of four conventionally powered Scorpene attack submarines, and the construction of a nuclear-powered submarine to be built with French cooperation.

The signing ceremony took place in the presence of Brazilian President Luiz Inacio Lula da Silva and visiting French President Nicolas Sarkozy in Rio de Janeiro.

A French official traveling with Sarkozy said the total value of the contracts was 8.6 billion euros (12 billion dollars) -- 6.7 billion euros (9.4 billion dollars) for the submarines, and 1.9 billion euros (2.6 billion dollars) for the helicopters.

The French government will pocket around six billion euros (8.4 billion dollars) of that total, with the rest going to private defense firms involved in the contracts.

The contracts involve significant transfers of technology -- a priority for Brazil, which wants to develop an advanced defense industry of its own -- and concretize a strategic partnership accord inked by Sarkozy and Lula.

The French president told a news conference his decision to allow the technology transfer was a conscious choice "to help Brazil have a status as a military power in the service of peace."

Lula, at his side, said: "Today, France is closer to Brazil, Brazil is closer to France."

Following the signing of the contract, EADS CEO Louis Gallois said in Rio that Eurocopter, a subsidiary of European aerospace giant EADS, would invest 300 million dollars in Brazil under the contract for its EC-725 Cougars.

Eurocopter said it was the biggest helicopter deal in Latin America.

Brazil has said it is looking to use the Scorpene submarines to patrol its territorial waters, which have recently yielded discoveries of massive oil fields.

Brazilian engineers will be responsible for building the nuclear engine of the atomic-powered submarine along with Argentine colleagues, without help from France. But the rest of the vessel will rely on French technology.

The conventional subs will be built in France, with participation from the Spanish company Navantia.

Brazil is to build a submarine base near Rio de Janeiro to house the vessels.

The helicopters are to be assembled in Brazil, in a plant in the southeast Minas Gerais state owned by the Brazilian firm Helibras, in which Eurocopter currently holds a 45 percent stake. Gallois said Eurocopter would now manage 85 percent of Helibras.

EADS currently employs about 300 people in Itajuba and will grow its personnel to 700 to manufacture Cougars. A new factory will then be built in the state of Rio de Janeiro, where certain parts will be manufactured thanks to the transfer of technology between France and Brazil.

The first of those aircraft should be delivered in 2010, Helibras said in June.

The contracts reflected the strategic partnership signed by the French and Brazilian presidents that strengthens military, political, economic, space, biodiversity and scientific cooperation.

Sarkozy's two-day official visit in Rio was dominated by the search for a concerted Euro-Brazilian response to the global economic crisis.

"France wishes to provide content for the strategic partnership that will allow Brazil and France to speak in the same voice in the international meetings" that will take place in 2009, said Sarkozy, currently at the helm of the rotating presidency of the European Union.

Both countries indicated they were willing to work together to prepare the next G20 summit of industrialized and emerging economies in April in London.

Sarkozy also said he would stay in Brazil on vacation through December 29 with the family of his wife Carla Bruni outside Rio, with French officials fiercely guarding the destination as secret.

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