Lockheed Martin has been contracted by the US Air Force (USAF) Life Cycle Management Center's Mobility Directorate to supply 78 C-130J Super Hercules military transport aircraft.
Under the multi-year contract, the company will supply 78 C-130J aircraft over the next five years.
The contract, which comes with an option to buy up to 83 aircraft, would save the US Defense Department more than $680m.
It will also provide the Air Force, Navy and Coast Guard with important airlift capabilities.
Mobility Directorate supervisory contract officer Joseph Fountain said: "This contract is significant because it provides the taxpayer with the best bang for their buck and allows our customers, including the Marine Corps, Coast Guard, Air Force Special Operations Command, and Air Force Mobility Command, to save money and use it for other requirements."
The J model fitted with improved avionics and propulsion systems will replace existing C-130H models and add to the J models currently in the Air Force fleet.
It provides additional aircraft range, higher maximum speed and shorter takeoff distance.
Mobility Directorate programme executive officer Kevin Buckley said that the contract represents the directorate's commitment to providing the warfighter with vital airlift capabilities at an affordable cost.
Buckley added: "The men and women on our team are motivated by the fact that the work we do directly impacts the warfighter.
"I'm extremely proud of the team and I know we will continue to provide war-winning weapon systems."
Powered by four Allison AE2100D3 turboprop engines, the C-130J can be used for tactical missions in the harshest environments.
The aircraft is in production for the USAF, the Royal Australian Air Force and the Italian Air Force and are ordered by the Kuwaiti Air Force and the Danish Air Force.
Image: A C-130J Super Hercules assigned to the 19th Airlift Wing takes off from Camp Robinson. Photo: courtesy of US Air Force photo / Staff Sgt. Jeremy McGuffin.