Ursula von der Leyen (seated L) and Abdel Fattah Al Sisi (seated R) sign deal in Cairo on Sunday. AFP

The deal was signed on Sunday afternoon in Cairo in a ceremony attended by Egyptian President Abdel Fattah Al Sisi, European Commission President Ursula von der Leyen and leaders of Belgium, Italy, Austria, Cyprus and Greece.

Sisi met separately with von der Leyen and other European leaders before the signing ceremony. The aid package includes both grants and loans over the next three years for the Arab world’s most populous country, according to the EU's mission in Cairo. Most of the funds - 5 billion euros ($5.4 billion)- are macro-financial assistance, according to a document from the EU mission in Egypt.

The mission said that the two sides have promoted their cooperation to the level of a "strategic and comprehensive partnership,” paving the way for expanding Egypt-EU cooperation in various economic and noneconomic areas.

Sisi's office said in a statement that the deal aims to achieve "a significant leap in cooperation and coordination between the two sides and to achieve common interests.”

The deal, known as the Joint Declaration, aims among other things to promote "democracy, fundamental freedoms, human rights, and gender equality,” according to the European Commission. Both sides will also deepen their cooperation to address challenges related to migration and terrorism.

The EU will provide assistance to Egypt’s government to fortify its borders, especially with Libya, a major transit point for migrants fleeing poverty and conflicts in Africa and the Middle East. The 27-nation bloc will also support the government in hosting Sudanese who have fled nearly a year of fighting between rival generals in their country. Egypt received more than 460,000 Sudanese since April last year.

The deal comes amid growing concerns that Israel's looming ground offensive on Gaza's southernmost town of Rafah could force hundreds of thousands of people to break into Egypt's Sinai Peninsula. The Israel-Hamas war, now in its sixth month, have pushed more than 1 million people to Rafah.

Egypt says there are 9 million migrants, including about 480,000 who are registered refugees and asylum-seekers with the UN refugee agency. Many of those migrants have established their own businesses, while others work in the huge informal economy as street vendors and house cleaners.

For decades, Egypt has been a refuge for migrants from sub-Saharan Africa trying to escape war or poverty. Egypt is a destination and a haven for some, because it's the closest and easiest country for them to reach. For others, it's a point of transit before attempting the dangerous Mediterranean crossing to Europe.

Egypt reached a deal with the International Monetary Fund earlier this month to increase a bailout loan to $8 billion, up from $3 billion, after marathon negotiations. The deal with the IMF was combined with economic reforms that included the flotation of the Egyptian pound and a sharp raising of the main interest rate.