(FILE PHOTO)This handout picture obtained from the Russian Defence Ministry's official Facebook page on November 26, 2015 shows Russia's S-400 air defence missile systems at the Hmeimim airbase in the Syrian province of Latakia. (AFP PHOTO)

ANKARA, Dec. 29 (Xinhua) -- Turkey and Russia on Friday inked a loan agreement in Ankara for purchase of the S-400 missile defense system worth 2.5 billion U.S. dollars, a Turkish official told Xinhua.

Russia will provide Turkey with four batteries of S-400 surface-to-air missile system under the deal and the latter will pay 45 percent of the cost up front with Moscow providing loans to cover the remaining 55 percent.

The two countries had reached an agreement for the purchase, but have been discussing on a loan provided by Russia.

Turkish President Recep Tayyip Erdogan said Turkey will borrow the loan on Russian ruble, instead of U.S. dollar, so the debt will be cheaper for Ankara.

"We will not borrow over dollar, we will borrow over rubles. The Treasury's debt will be cheaper," Erdogan told journalists on Wednesday.

Purchasing on ruble, Turkey will save up to 3 percent of the total debt, he said.

The first delivery of the S-400 missile system is scheduled to be accomplished in March 2020.

The S-400 is Russia's most advanced long-range anti-aircraft missile system and can carry three types of missiles capable of destroying targets, including ballistic and cruise missiles.

Turkey is the first NATO member state to purchase the S-400 missile system.