In a move that has come as a huge setback to ties between Spain and Saudi Arabia, the European nation has now confirmed that it has scrapped a deal over the sale of weapons to their Middle Eastern trade partner.  

In its official announcement, Spain said that it had cancelled its 2015 deal with the Kingdom and would now be returning 9.2 million euros ($10.6 million) that Saudi had already paid in advance, according to Eldiario.

The decision comes following a Saudi air strike which hit a school bus and killed nearly 40 children in early August.

As part of the deal, Spain was set to sell 400 laser-guided bombs to Saudi Arabia.

However, with Saudi leading the Arab coalition that has been fighting rebels in Yemen, concerns over the use of these arms have grown.

Spain’s new government has said all arms sales must comply with strict security criteria which include insuring weapons are not used in any other country except the one they are destined for.

Announcing the country’s decision, a spokesperson for the Spanish Defence Ministry confirmed in a statement to Cadena Ser radio, that Spain planned to return the advance that has already been paid by the Saudis for the arms.

The deal which was signed by Spain’s previous conservative administration, has now been scrapped by the country’s new Socialist government – merely weeks after the Saudi-led Arab coalition launched an air strike in Yemen last month and killed dozens of civilians, including children.

According to data released by the Amnesty International, Spain is one of biggest arms exporters to Saudi Arabia.