Advanced engines to upgrade the military version of the IL-76MD plane will be made by a plant in Perm.

United Engine Corporation has concluded a deal worth over $1 billion with United Aircraft Corporation to supply 156 engines for Il-76MD-90A military transport planes, Interfax reported Wednesday.

UEC is part of Rostec, which brings together 663 civilian and military-industrial producers, while UAC consists of the many manufacturers of the still recovering Soviet aircraft construction industry. The deal could save the manufacturing plant in Perm that specializes in the engines, experts said.

The first shipments are scheduled for this year, a UAC source told Vedomosti.

The engines are destined for the Il-76MD-90A heavy strategic military transport aircraft, 39 of which were ordered by the Defense Ministry last year.

"This is the first plane made almost from scratch that Russian industry has produced over the last 21 years," President Vladimir Putin told Itar-Tass, adding that the order is the biggest in the aviation sector's history.

Made by the Aviastar facility in Ulyanovsk, the Il-76MD-90A is a modernized version of the IL-76 transport plane, designed by the famous Ilyushin bureau in the 1970s, originally for civilian use. Aviation experts estimate that the air force has about 200 different IL-76 models at its disposal that could be further modernized. The IL-76 has also been a top seller on export markets over the last decades.

The contract is part of a larger state order for UAC subsidiaries to supply defense and law enforcement agencies with 150 aircraft of various models, at a total cost of $6.6 billion, that was announced earlier this year.

State Corporations Agree $1Bln Aircraft Engine Deal