"Today, the United States is proud to announce the signing of a milestone $2 billion Foreign Military Financing (FMF) direct loan agreement to support Poland's defense modernization," the State Department said in a press release.

The State Department said the US would also provide $60 million in FMF funds to cover the cost of the loan. The press release described Warsaw as a "stalwart US ally" as Poland has become a major hub for arms shipments to Ukraine and spends more on its military than most European NATO members.

"In addition to its central support role in facilitating international assistance to neighboring Ukraine, Poland has demonstrated its ironclad commitment to strengthening regional security through its robust investments in defense spending," the State Department said.

Poland has been unloading its old Soviet-made equipment into Ukraine and is purchasing lots of US and other NATO military equipment, a policy that's been a boon for Western arms makers. The US has also significantly expanded its military presence in Poland since Russia invaded Ukraine, with about 10,000 US troops now stationed there.