"This decision is important to advancing regional peace and Egypt's specific and ongoing contributions to US national security priorities, particularly to finalize a ceasefire agreement for Gaza," a State Department spokesman said.

Egypt, along with the US and Qatar, has been mediating indirect talks between Israel and Hamas to reach a ceasefire deal in the 11-month-old Israeli war on Gaza.

The State Department spokesman also mentioned Cairo's role in promoting a ceasefire in Sudan, where a civil war has been raging for more than 16 months.

Since the outbreak of the Sudanese crisis, Egypt has received thousands of Sudanese refugees fleeing the war and hosted several summits to address the crisis.

US Secretary of State Antony Blinken announced the budget allocation in a memo to Congress, as required by US law.

The US has been providing Egypt with aid, including military assistance, since Cairo's 1979 peace deal with Israel.

Each year, Egypt receives approximately $1.3 billion in US military aid, as well as an annual economic assistance package.