Air New Zealand has opted for Boeing over Airbus to replace its older widebody aircraft, agreeing to buy eight Boeing 787-10 Dreamliner aircraft with an option to purchase 12 more.
The airline said on Monday the first of the jets will join its fleet in late 2022 and the rest will be delivered through to 2027.
The order has a list value of $US2.7 billion ($A3.9billion), but as usual with such agreements, Air NZ negotiated a significant but undisclosed discount.
The aircraft will replace Air New Zealand's eight 777-200 aircraft, which will be phased out by 2025.
"The game changer for us has been that by working closely with Boeing, we've ensured the 787-10 will meet our network needs, including the ability to fly missions similar to our current 777-200 fleet," chief executive Christopher Luxon said.
AirNZ's 777-200 fleet operates to Asia, North America and destinations across Australia and the Pacific, a spokeswoman said.
The airline also currently operates 13 of the more popular midsize 787-9 Dreamliners, and has a 14th on the way.
The 787-10 is the largest Dreamliner, 68 metres long with room for 330 passengers, about 40 more than the 787-9.
"This is a hugely important decision for our airline," Mr Luxon said.
"With the 787-10 offering almost 15 per cent more space for customers and cargo than the 787-9, this investment creates the platform for our future strategic direction and opens up new opportunities to grow."
Mr Luxon signed letters of intent on Monday morning with Boeing and GE executives at the airline's Auckland headquarters, where he told reporters that Air NZ is continuing to assess New York as a potential new route option, especially in light of the new fleet announcement.
The new aircraft will be powered by GE Aviation's GEnz-1B engines, rather than the Rolls-Royce Trent 1000 engines that power the airline's 787-9s and have given the airline problems.
Air NZ said the new planes and their engines will be 25 per cent more fuel efficient than the 777-200 jets they are replacing.
Air New Zealand's widebody fleet currently consists of the 13 787-9s, the eight 777-200s that are being phased out, and seven Boeing 777-300s.
AirNZ has some flexibility under the agreement, including the right to increase the order by up to another 12 Dreamliners and to switch to the smaller 787-9s.
Separately, AirNZ indicated at its investor day briefing that it expects its 2019 earnings to come in at the low end previously announced expectations of $NZ340 million to $NZ400 million ($A321m to $A378m).
AirNZ now says it is targeted 2019 earnings "to exceed $340 million," based on the current market environment and taking into account an additional $25 million headwind from increased jet fuel prices.
At 1446 AEST, Air New Zealand's ASX-listed shares were down three cents, or 1.15 per cent, to $2.57.