Canada's air force will buy 16 Airbus C295W aircraft modified for search and rescue to replace its aging fleet, at a cost of Can $2.4 billion (USD$1.8 billion), the government announced Thursday.

The contract will also include servicing the planes over 15 years for an additional Can$2.3 billion (US$1.7 billion), through a joint venture between Airbus Defence and Space and Canada's PAL Aerospace, the government said.

Airbus's bid to replace 19 de Havilland Buffalo and Lockheed Hercules, which have been in use for five decades, beat out Italian and Brazilian competitors.

"We are acutely conscious of the importance of search and rescue in Canada's vast and challenging territory and we are honored to have been selected to provide the aircraft and service to ensure that the role is carried out effectively," Simon Jacques, the head of Airbus Defence and Space said.

Defense Minister Harjit Sajjan said the purchase means a technological upgrade in the military's capabilities.

He underscored the aircraft's onboard radar and sensors capable of locating people in distress in the dark and in harsh weather, including in the Arctic.

This contract brings to 185 the number of C295s sold by Airbus around the world since 1997.

Canada's C295Ws will join other Airbus aircraft used by the Canadian military for air-to-air refueling, transport and VIP travel.

The first search and rescue planes will be delivered to Canada in three years.

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AIRBUS GROUP