The new diesel-electric boat, named the Tannin -- Alligator -- was handed over during a ceremony at HDW's Kiel shipyard Thursday to an Israeli team headed by navy commander Vice Adm. Ram Rothberg.
The Tannin is the first of three "super-Dolphins" the Israelis will acquire from Germany.
These 1,925-ton boats will be equipped with advanced systems that greatly enhance operational capabilities, which Western sources say include a new propulsion system that makes them almost impossible to detect and a special diesel and hydrogen conversion system that allows them to produce their own fuel, thus extending range and endurance.
The Tannin is expected to be operational by mid-2013 after Israeli sea trials.
The sources say the advanced Dolphins are equipped to carry Israel-built cruise missiles with a range of some 940 miles, and nuclear warheads. This enhances Israel's second-strike capability, to respond to a nuclear attack with its own nuclear arsenal, on the oft-stated pledge by Israel that it won't be the first in the Middle East to use nuclear weapons.
The only target for such weapons, for now at least, would be Iran, which Israel and the United States alleges is driving to produce nuclear weapons that challenge Israel's nuclear monopoly in the region.
Israel has the capability, unmatched in the region, to deliver nuclear weapons by air -- on aircraft and Jericho ballistic missiles -- and sea.
By deploying Dolphins in the Arabian Sea, off southern Iran, Israel greatly extends its strategic reach and gives it the option of pre-emptive first-strike attack, using nuclear weapons if necessary.
Even if Israel is obliterated in a nuclear attack, the Dolphins could retaliate by launching missiles from the Arabian Sea.
Israel has three early model Dolphins in service, all modeled on Germany's Type 209 submarine by HDW, a subsidiary of ThyssenKrupp Marine Systems. These were delivered in 1998-2000.
With the Tannin, and two more "super Dolphins" on order, Israel will be able to maintain at least one submarine in the Arabian Sea at all times. The fifth Dolphin is scheduled for delivery in 2014 and the sixth in 2016.
Most of the Dolphins' integrated systems are produced by major Israeli defense companies like Tadiran, Elbit, Israel Aerospace Industries and Rada.
These vessels are the most expensive weapons platforms in Israel's military inventory.
Along with the purchase of more advanced surface warships, they're transforming the Israeli navy, for decades little more than a coastal defense force, into a strategic blue-water force.
"The challenges today are much wider and the submarines are one important aspect of this," said a senior Israeli officer with the navy team in Kiel.
"The Middle East has changed -- including Egypt and Syria, and Lebanon is the same Lebanon -- and we must be able to operate in several arenas and on several fronts at the same time."
The naval expansion has been made possible to a large degree by Germany's sometimes reluctant agreement to pay the lion's share of the cost for the game-changing Dolphins.
Germany has for decades sought to accommodate Israel in atonement for the Holocaust during the Nazi era, although this has been wearing thin because of the global economic downturn.
Germany agreed recently to Israeli Prime Minister Binyamin Netanyahu's request that Berlin pay one-third of the $500 million-$700 million cost of the sixth Dolphin.
Israel ordered its first Dolphins after the 1990 Gulf War, when it became clear the Jewish state would need to extend its strategic reach to counter the proliferation of ballistic missiles in the region, particularly fundamentalist Iran.
Germany donated the first two Dolphins and paid half the $350 million cost of the third.
In 2006, Israel ordered two super Dolphins, including the now-delivered Tannin, with Germany agreeing to pay one-third of the total cost of $1.27 billion.
It did so despite deep differences between Netanyahu and German Chancellor Angela Merkel's coalition on Israel's refusal to quit the occupied West Bank to clinch a peace agreement with the Palestinians and other issues.