Egypt has agreed to buy two assault ships from France, the French government has announced.

The move increases its capabilities on and off-shore as the country tries to assume a more prominent role against Islamic State militants.

The assault ships, which can each carry 16 helicopter gunships, 700 troops and up to 50 armoured vehicles, were originally intended for Russia.

France continued building to Russia's specifications until the deal fell apart because of the Ukrainian crisis. It was originally supposed to be the biggest arms sale ever by a Nato country to Russia.

France agreed to refund €950 million already paid by Russia. France did not say how much Egypt has agreed to pay, but denied losing money.

Russia had traditionally supplied Egypt's military, but the country has turned more recently toward Western arms purchases, with France taking a leading role.

Egypt also purchased 24 advanced fighter jets from France earlier this year as it sought international help to bomb Islamic State targets.

Although the terms of the contract were not released, analysts said it was unlikely that Egypt would re-sell the ships to Russia given the increasing value of its relationship with France.

The Egyptian government has been battling a long-running insurgency in the northern Sinai region, which escalated after the military ousted Islamist president Mohammed Morsi in July 2013 amid massive protests against his rule, and cracked down on Islamic groups. A local Islamic State affiliate has been claiming responsibility for militant attacks in the area.

Peter Roberts, a senior research fellow at the Royal United Services Institute and a former Royal Navy officer, said Egypt's military is shifting its focus, previously focused on the Sinai, to a more regional outlook.

"It does provide an interesting window into the decision-making of Egypt's leaders at this moment," he said.

Analysts said the purchase showed Egypt's attempt to take a more muscular role in the region, notably with the disintegration of Yemen and Libya.

"The reality is that Egypt is not going to try to conquer Libya or Yemen," said Ben Moores, an analyst with IHS Janes. "It's not trying to change those countries. It's just trying to keep a lid on them."