Lithuania says it has signed a contract to purchase dozens of German military vehicles worth 386 million euros ($437 million), in the Baltic country's largest weaponry purchase to date.

The Lithuanian Defense Ministry says the deal was signed Monday with Rheinmetall MAN Military Vehicles for 88 armoured Boxer cars.

The agreement comes amid growing tensions over neighboring Russia's increased military presence in the Baltic Sea region.

Lithuanian Defense Minister Juzas Olekas said at the signing ceremony that the contract "is a signal that Lithuania takes care of its security, and investments into it seriously."

Russia's actions in Ukraine and military activity in the Baltic region caused the former Soviet republic to reintroduce compulsory military service last year and sharply increase defense spending.