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.
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.