A panel of senior Greek government and military officials has approved a 1.2-billion-euro ($1.45 billion) deal to upgrade more than half of the country's American-made F-16 fighter planes.

Officials said the deal approved by the Greek cabinet on Saturday will give 85 of Greece's fleet of F-16s capabilities similar to the much more advanced F-35 fighters minus stealth technology.

The terms of the agreement call for Greece to pay for the improvements until 2027 or 2028, but the U.S. agreed to cap annual payments at 150 million euros ($182 million) after that.

U.S. Ambassador to Greece Geoffrey Pyatt tweeted that the approval was built on Prime Minister Alexis Tsipras's visit to the White House in October.

The deal had originally been announced in October during a visit by Tsipras to Washington.

But the government came under immediate criticism over the price tag, estimated at $2.4 billion at the time over 10 years.

Athens had insisted the cost would not exceed $1.3 billion and would not destabilize its precarious budget.

The first plane will be delivered by 2020 at the earliest, with most of the work undertaken by Greek state defense contractor EAV, Ta Nea daily said.

Tsipras has said the planes, some of them dating from 1989, risked being rendered inoperable without the upgrade.

Greece spends two percent of its budget on defense, one of only five NATO members to meet this alliance target.