Boeing has been awarded an expanded contract by the US Air Force to supply 6,000 joint direct attack munition (JDAM) kits.
The modification contract will increase the overall value of the phase from $72m to $229m.
JDAM is a low-cost guidance kit that converts existing 500lb, 1,000lb and 2,000lb unguided free-fall bombs into accurately guided smart weapons.
The modular design of the JDAM enables easy upgrade of the weapon in the field to provide additional capability, such as laser guidance and extended range.
Boeing direct attack programmes director Dan Jaspering said that JDAM provided warfighters with an effective, accurate and battle-tested weapon.
The air force has used JDAM weapons in both Afghanistan and Iraq.
Boeing will start production in 2010, with delivery expected in 2011 and 2012, which will be part of the third procurement of a six-year contract Boeing signed with the USAF in January 2008.
The agreement has a potential total value of $1.3bn with deliveries extending to 2015 if all options are exercised.