Military chiefs in Spain claim they are stopping the controversial sale of laser-precision bombs to Saudi Arabia.
A €9.2 million weapons contract with Riyadh will be scrapped and the money returned, the country’s defence ministry said.
Spain’s new centre-left government vowed to review arms sales to Saudi Arabia on August 16.
It came days after airstrikes by the Saudi-led coalition in Yemen hit a school bus, killing more than two dozen children.
There is no suggestion bombs made in Spain were used in the bus attack. Human Rights Watch said markings of a US arms manufacturer were found on remains found at the scene.
Tuesday’s announcement came as Amnesty International and Greenpeace were set to hand the Spanish government a petition against the sale of arms to Saudi Arabia and Israel.
Spain sold €270 million of military equipment to Saudi Arabia in 2017, according to official data, while arms exports to Riyadh made up 6.2% of the country's total outgoings.
This year Spain sold five small warships to the Middle Eastern country.
Saudi Arabia is one of the biggest arms importers in the world, according to the Stockholm International Peace Research Institute.
Its main suppliers between 2013-2017 were the US and the UK.
The UN Human Rights Office says the Yemen conflict, which broke out in 2015, has killed nearly 6,000 civilians.