A US embassy statement said the declaration of intent was signed by Ambassador Stuart Jones and Iraqi Finance Minister Hoshyar Zebari.
The US Foreign Military Finance credit facility will help Iraq "defer payment for the purchase of ammunition and maintenance of its F-16s (jets) and M1A1 (Abrams) tanks," Jones said.
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The deal gives Iraq eight-and-a-half years to pay for its military purchases, in what the statement said was part of Washington's efforts to ensure Baghdad's economic difficulties do not affect the fight against IS.
Iraq, whose economy is overwhelmingly reliant on oil, is facing a bruising budget crunch caused by the drop in crude prices and the ongoing cost of the war on IS.
The United States, which occupied Iraq for eight years, is the lead nation in a coalition providing Iraq with assistance in the form of air strikes, military advising and training.