The Israeli cabinet's late-stage cancellation of the program, by a 12–11 vote, continued to arouse controversy and bitterness in Israel for decades, with Moshe Arens, the main political figure behind the Lavi project, stating in 2013 that if the project had not been cancelled the IAF "would be operating the world's most advanced fighter, upgraded over the years to incorporate operational experience and newer technology.

To compensate, the Lavi was fitted with a sophisticated digital fly-by-wire system which allowed the aircraft to take advantage of this particular wing design while eliminating this shortcoming.

[3] By August 1987, the month in which the Lavi was canceled, a total of 82 sorties had reportedly been flown between the two completed prototypes, during which a significant proportion of the flight envelope had been explored.

[7][10] While the Lavi had attracted the steadfast support of IAF veteran and Likud minister Moshe Arens, there was considerable dissent over the development.

A failure to proceed with the development could lead to significant job losses and possibly contribute to emigration;[15] the Israeli State Comptroller argued the resulting unemployment was negligible.

The gutted airframe of B-02 was subsequently placed on static display at the Israeli Air Force museum at Hatzerim Airbase; the remaining units, B-01, B-04 and B-05, were all ultimately scrapped.

[7] While the Lavi project had been terminated without any production aircraft being produced, the development represented an important opportunity to demonstrate and advance the capabilities of Israel's aerospace industry.

Many of the aircraft's subsystems, avionics, and components went on to be developed and made commercially available, fueling defense export sales and proving to be a lucrative business in its own right.

It resulted in a new level in avionics systems, and contributed to Israel's high-tech boom of the 1990s by releasing into the economy the technological talents of around 5,000 Israeli scientists and engineers who had been employed on this one project; many, for example, were reemployed on the Arrow anti-ballistic missile program.

[34][35] In 2008, aviation publishing house Jane's alleged that China's development of the Chengdu J-10 had benefited from technical information from the Lavi project, citing Russian engineers who claim to have heard this from Chinese colleagues.

[38] There have been no public statements or formal claims along those lines; by 2000, however, advanced technology transfer to China of any origin had become anathema to the US,[39] which forced Israel to cancel a sale of Phalcon airborne early warning planes.

The IAI Lavi was a single-seat, single-engine multirole fighter aircraft, principally designed to conduct high-speed penetration and first-pass bombing missions while maintaining a high level of manoeuvrability and survivability.

[9] The Lavi was powered by a single Pratt & Whitney PW1120 turbofan engine, capable of generating 20,260 lb of thrust and enabling the aircraft to attain a maximum speed of Mach 1.85.

[9] The Lavi employed a mainly traditional airframe, the majority of development focus being upon the avionics and systems to provide the aircraft's performance edge instead.

[6] In order to meet the low structural weight requirements imposed, the use of composite materials was employed in elements such as the wing and its substructure, as well as the fin and the skin.

The forward fuselage was shaped in a manner that resulted in it naturally directing air into the engine intake and to avoid inlet blanking while flown at a sideslip condition.

[6] These are claimed to have been capable of rapid threat identification and automated response, incorporating a suite of active and passive countermeasures, such as power-managed noise and deception jamming systems.

[6] Elta also developed the EL/M-2032 Doppler multi-mode radar for the Lavi, which was equipped with a programmable signal processor and was capable of various air-to-air and air-to-ground modes, including high-resolution mapping, terrain avoidance, and look-down/shoot-down functionality.