Boeing ( BA) has agreed to lease 100 airplanes that will be used as refueling tankers to the Air Force, according to published reports.

The deal is reportedly worth about $16 billion. Boeing is said to have dropped the lease price on a group of 767 jets to $131 million each, plus $7 million in financing costs, ending months of negotiations with the government.

Reports indicate that the Air Force will have the option to buy the planes for $4 billion at the end of the six-year lease.

Earlier in the day, some reports indicated that the overall value of the deal was about $21 billion. Boeing will start delivering the planes in 2006.

In afternoon trading on the New York Stock Exchange, shares of Boeing were up 86 cents, or 3%, to $29.96.

Reuters reported that the Air Force wants to accelerate the retirement of its KC-135 aerial refueling tankers, which have an average age of 43 years.

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