The long-pending procurement was cleared by the Cabinet Committee on Security two weeks back.
"Contract signed between #MinistryOfDefence and @AirbusDefence &Space, Spain for procurement of 56 C-295 transport aircraft for the #IAF," Defence Ministry Spokesperson A Bharat Bhushan Babu tweeted.
Under the deal, 16 aircraft will be delivered in a flyaway condition by the Airbus Defence and Space within 48 months of signing the contract.
The remaining 40 planes will be manufactured in India by a consortium of the Airbus Defence and Space and Tata Advanced Systems Limited (TASL) within 10 years of signing the contract, officials said.
The C-295 MW aircraft is a transport plane of 5-10 tonne capacity.
This is the first project of its kind in which a military aircraft will be manufactured in India by a private company.
"All 56 aircraft will be installed with indigenous electronic warfare suite," the ministry had said on September 8 after the procurement was cleared by the Cabinet Committee on Security.
The in-principle approval for the Avro replacement programme was accorded around nine years back.
A large number of detail parts, sub-assemblies and major component assemblies of aerostructure are scheduled to be manufactured in India.
The ministry had said that before completion of the deliveries, a servicing facility for C-295 MW aircraft is scheduled to be set up in India.
SEE ALSO:
NASA's InSight lander has finally detected 3 big Mars quakes, including one that lasted nearly 90 minutes
Sansera Engineering IPO debuts with a little of 9% premium — short of what the grey market had indicated
Amazon enters the content distribution space in India, will allow customers to subscribe to more video streaming platforms