The deal is valued at $196.4m, but Croatia will pay only $145.3m as the remaining $51.1m will be considered a donation by the US.
Croatia has been negotiating the procurement of US Bradley M2A2 infantry fighting vehicles since 2017.
As part of the development, the Croatian government has authorised Defence Minister Mario Banožić to implement activities in the procurement.
Croatian Prime Minister Andrej Plenković said: “Agreement has been reached with the US side regarding the army fighting vehicles that have been discussed over the past few years.”
As part of the deal, the country will receive 62 fully equipped fighting vehicles, five for training, and 22 for spare parts, taking the order to 89 vehicles, instead of the initially planned 84 units.
It also includes a 25mm automatic cannon, a 7.62mm machine gun, anti-tank missiles, and other related equipment.
With this acquisition, both nations will be able to strengthen their partnership and alliance.
In addition, the deal secures work for Croatian metal mechanical engineering firm Đuro Đaković.
The company will co-operate with the US-British BAE Systems company to repair and upgrade the vehicles in its factories in Slavonski Brod.
In addition to the $51.1m donation, the US will donate another $11m to upgrade the vehicles.
The US will start delivering the vehicles in 2023 and, by 2026, Croatia will establish a medium infantry brigade.
Last year, the US Army placed a new order with DiSTI for M2A3/M2A4 Bradley fighting vehicle (BFV) trainers.