The United States has decided to reimburse Pakistan $688 million for the cost of providing support for some 140,000 troops on the border with Afghanistan.
Deputy Defense Secretary Ashton Carter notified Congress that the US would make the payment to Islamabad for expenses incurred from June through November 2011.
"In making this determination, I find that the reimbursement is consistent with the national security interest of the United States and will not adversely affect the balance of power in the region," Carter wrote in the Dec. 6 letter.
Lawmakers have expressed frustration with Pakistan, questioning its commitment in the fight against terrorism and using the foreign aid budget to punish Islamabad. The anger boiled over after the killing of Osama bin Laden in Pakistan in May 2011, with suggestions that the country was harboring the terrorist leader.
The relationship improved slightly this year when Secretary of State Hillary Rodham Clinton apologised to Pakistan for the killing of 24 Pakistani troops in late 2011 and Pakistan, in return, agreed to reopen the overland supply lines to US-led coalition forces.
In July, top Senate Republicans said the money should be released, albeit reluctantly.
"If our commanders believe that releasing the funds helps the war effort - yes. I don't want to second-guess these people," said Sen. Lindsey Graham, a Republican. "Pakistan on a good day is very hard. It is an unreliable ally. You can't trust them, you can't abandon them. The biggest beneficiary is the men and women fighting the war. And I want Pakistan to be stable. And if the money helps them become more stable, good.
"If you cut the money off, what leverage do you have? There may come a day when we do that, but not yet," he said.
The reimbursement had been held up for months.
Republican Sen. Rand Paul has been one of the fiercest foes of aid to Pakistan.