The Malaysian Government will phase out the fleet of Royal Malaysian Air Force (RMAF) MiG-29N fighter jets by the end of 2010.
The phase-out is expected to save the nation $76m (RM260m) annually.
The RMAF purchased the 18 Russian-made MiG-29N aircraft in 1993 and used them as interceptor jets during air operations.
Malaysian defence minister Datuk Seri Dr Ahmad Zahid Hamidi said the money saved would be used to pay for the maintenance of other aircraft and systems that were still being used in the RMAF.
"The weaponry for the fighter jets has reached the end of its lifespan and extending the lifespan is costly and would not be viable," he said.
The fighter jets will also be phased out, due to difficulty and the high costs associated in maintaining some old components and systems for the jets.
"After the MiG-29N fighter jets have been phased out, their role will be carried out by the Sukhoi SU-30MKM, which are among the most sophisticated long-range fighter jets," he said.