The ministers are expected to raise the financial ceiling on the European Peace Facility (EPF) - a fund that has already allocated some 5.6 billion euros in military aid for Ukraine - at a meeting in Luxembourg on Monday.

However, Hungary continues to block the allocation of another 500 million-euro tranche of the fund for Ukraine, according to officials.

Budapest has said it will not lift its block until Kyiv removes Hungarian bank OTP from a list of companies it deems "international sponsors" of Russia's war in Ukraine. Hungary has branded the bank's inclusion "scandalous".

"On Monday, a decision will be taken to top up the European Peace Facility by 3.5 billion euros," said a senior EU official, speaking on condition of anonymity.

"But there will be no decision on a new tranche of the European Peace Facility for Ukraine because there is not yet agreement among member states on that."

The fund, established in 2021, was conceived for the EU to help developing countries buy military equipment. But the 27-member union quickly decided to use it also to get weapons to Ukraine after Russia's invasion in February last year.

The war has meant that the EPF has burned through cash far more quickly than anticipated. It originally had a budget of 5 billion euros, meant to last until 2027. That ceiling has already been raised once, by 2 billion euros, last December.

EU foreign policy chief Josep Borrell requested the latest top-up last month. EU officials argued it was needed not just to keep funding supplies for Ukraine but also to ensure there is enough money to provide aid to other countries as well.

The fund is separate from the EU's budget, which is not allowed to finance military operations.

But the fact that EU countries clubbed together to buy weapons and ammunition for a country at war with Russia marked a historic step for the bloc, which for decades avoided involvement in defence and military matters.

The fund allows EU countries that supply weapons and ammunition to Ukraine to claim back a portion of the cost. EU countries contribute to the fund according to the size of their economies.

($1 = 0.9186 euros)

(Reporting by Andrew Gray; Editing by Andrea Ricci)