Canada is pulling out of a NATO surveillance project 20 years in the making that will use unmanned aerial vehicles to collect information.

The Alliance Ground Surveillance project was conceived in 1992. Canada signed a memorandum of understanding with 13 other countries, including the U.S., Germany and Norway, in 2009.

The program, with its main operating base in Italy, would have cost Canada up to $450 million over 20 years for acquisition and in-service support. But it's now seen as a legacy project that's not affordable because of global economic conditions and Canada faced with having to make decisions over where to spend its defence budget.

A spokeswoman for the Department of National Defence said the full withdrawal will be effective in spring of 2012.

"NATO has been informed of these decisions. The details of our withdrawal are still under discussion with NATO," Kim Tulipan said in an emailed response to a question from CBC News.

"Canada’s commitment to the North Atlantic Treaty Organization Alliance (NATO) is unwavering. Canada is delivering on NATO operations around the world and has been at the forefront of efforts to transform and reform the Alliance to meet modern-day needs."

A NATO website for the surveillance project said the ability to have "eyes on target" at strategic ranges is a vital requirement and refers to the 2011 mission in Libya as an example of how surveillance is useful. The mission in Libya saw NATO troops provide air cover to protect anti-Moammar Gadhafi forces as they fought to unseat the country's leader.

The system  would allow NATO to perform surveillance over wide areas from "high-altitude, long-endurance, unmanned aerial platforms operating at considerable stand-off distances and in any weather or light condition."

NATO said the surveillance system will help monitor weapons of mass destruction and military force build-ups, evacuation operations, civil unrest and anti-piracy.

At a press conference last Friday to mark the end of the NATO defence ministers meeting, NATO Secretary General Anders Fogh Rasmussen said members had "found the way ahead on a practical funding solution" for the system.

"This means that a group of allies will acquire five reconnaissance drones. NATO will then maintain and operate them on behalf of all 28 allies. This will give our commanders the ability to see what is happening on the ground at long range and over periods of time – around the clock, and in any weather," he said.

Canada entered into an agreement on satellite surveillance and communications last month. The agreement with the U.S. and Australia gives Canada access to secure communication, surveillance and UAVs.