Russia will sign a 1.1 billion euro ($1.6 billion) deal on Friday to buy two French Mistral-class warships that has alarmed ex-Soviet neighbours and the United States, reports said.

The controversial contract, initially announced in January, will be signed by the two country's defence corporations on the sidelines of an investment forum in Saint Petersburg, RIA Novosti said.

The report, which quoted two Russian defence officials, made no mention of two other warships that were part of the initial framework agreement and which were supposed to have been built in Russia at a later date.

The report also failed to mention whether France had agreed to sell the sophisticated technology the ships usually come equipped with, and whose potential transfer to Russia has raised concern in the United States.

The Vedomosti business daily, however, said France has agreed to transfer to Russia an advance naval operating system called SENIT-9 -- one of the systems at the centre of the dispute.

In exchange, Russia has offered for purchase by France several new Russian sea planes used in search and rescue operations, Vedomosti said.

If the Vedomosti report is confirmed, the Mistral sale would represent the first transfer of military technology between a NATO member and Russia, sparking concern in some of France's Atlantic Alliance partners as well as former Soviet states.

Georgia's leader, a bitter foe of Russia, has warned that Moscow may use the ships to impose a blockade of his Black Sea republic, and the Baltic states have also expressed concern.

The Russian army has said such a ship would have helped it win its August 2008 war with neighbouring ex-Soviet Georgia within hours rather than days.

Russia's top general also warned in February that Russia may use the warships to help protect a chain of islands that are being bitterly claimed by Japan. Those comments provoked angry protests in Tokyo.

A Mistral-class ship can carry up to 16 helicopters, four landing craft, 13 battle tanks, around 100 other vehicles and a 450-strong force. It has facilities for a full command staff and is equipped with a 69-bed hospital.