The United Arab Emirates plans to invest €40 billion ($46.5 billion) in Germany, both sides announced during a state visit by President Mohammed bin Zayed al Nahyan to Berlin on Thursday.
The sum more than doubles the Gulf state's investment in the German economy so far, from the previous €34 billion.
Mohammed began a two-day state visit to Germany earlier on Thursday and was welcomed in Berlin by President Frank-Walter Steinmeier with full military honours. He later met Chancellor Friedrich Merz.
Both sides had previously said they planned to deepen relations.
The Emirati technology minister, Sultan Ahmed Al Jaber, said that Germany had been "an important strategic and economic partner" for his country for decades.
The planned additional investments "will promote those industrial sectors, technologies and skilled jobs that drive future growth and competitiveness," he said.
A further 29 deals between German and Emirati companies were inked during the visit, worth almost €9.4 billion.
Berlin and Dubai are setting up a German-Emirati Investment Council to promote investment and strengthen dialogue between the public and private sectors.
They also plan to expand cooperation in artificial intelligence and new technologies.
"The package is expected to contribute to strengthening industrial competitiveness, advancing technological leadership and supporting long-term economic growth in Germany," the statement said.
It spans investments in advanced digital infrastructure, including the development of new state-of-the-art data centres with a capacity of approximately 1 gigawatt.
The two sides also "welcomed plans for further corporate investments and partnerships between UAE and German companies, including initiatives involving Covestro, RWE, ADNOC and Masdar."
The Emirates plan joint investments with leading German industrial and technology companies. They would deepen the UAE's expertise in strategic sectors and enable the establishment of companies capable of serving growth markets in the Gulf region, Asia and Africa.
"The world has become a more turbulent place; old certainties are crumbling," Steinmeier said at a state banquet held in honour of Mohamed, who is the first UAE president to ever pay a state visit to Germany.
The desire on both sides to strengthen bilateral relations is also a response to new geopolitical tensions including the war on Iran, which has heavily affected the Gulf countries.
Steinmeier highlighted recent Iranian attacks on the UAE, saying the visit came just at the right moment. "For now, more than ever, what matters is having reliable partners, rational partners – partners who help one another and have something to offer one another."
"Germany is that kind of partner for you; you are that kind of partner for us," the German president said, according to a transcript of his speech released in advance.
In the later statement, the two underscored "the growing importance of reliable, like-minded partners, and affirmed their determination to stand together in defence of the international order."
Steinmeier acknowledged that the UAE had achieved impressive economic development, particularly by transforming the backbone of its economy from oil and gas to sustainable technologies and renewable energies.
"Not least because of its great potential in the field of hydrogen, your country is an exciting partner," he told Mohamed at the state banquet.
Emirati officials said Germany would bring its industrial strength, technological and scientific expertise and globally competitive companies to the deeper partnership.
The UAE, meanwhile, offers capital, long-term investment capacity, international connections and access to some of the world's fastest-growing markets, they said.
The UAE is Germany's most important trading partner in the Gulf. Last year, bilateral trade amounted to just over €13 billion ($15 billion).
Germany exported goods to the UAE worth around €11 billion, while imports totalled around €2 billion.
According to the German government, German investment is primarily directed towards technology and capital-goods-oriented products such as machinery and chemical products.
But bilateral trade is partly hindered by import duties and import and export restrictions. Berlin is backing ongoing negotiations between the European Union and the UAE on a free trade agreement.
Emirates airline is also set to be permitted to operate flights to Berlin-Brandenburg Airport (BER), Berlin said in a statement following the visit.
The German government has agreed that, in future, Emirates will be permitted to operate flights to a fifth airport in Germany - in addition to its four existing destinations - with an agreed number of connections, the statement said.
It does not name the capital, but Emirates has long sought access to Berlin's airport.
Berlin governing mayor Kai Wegner welcomed the step. "With daily Emirates long-haul flights from Berlin to Dubai, two growing economic regions are moving even closer together," he said.