Israeli investor Aurelius Capital and the German state of Lower Saxony plan to take over one of Volkswagen’s car factories and rebuild it for defense projects.

According to Volkswagen’s announcement, a memorandum of understanding was signed on Monday, and Aurelius will become the majority shareholder of the Osnabrück plant. Car production at this plant will be gradually stopped by 2027.

Europe’s largest automaker said that the first “anchor project” of Osnabrück will involve cooperation with the Israeli company Rafael Advanced Defense Systems.

Volkswagen added: “These plans include the possible manufacture of air defense systems and components for air defense systems for Germany and Europe.”

Lower Saxony is Volkswagen’s second-largest shareholder.