Years of haggling had stalled the A400M

The contract, worth 20bn euros (�14.5bn; $23.75bn), was signed by Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey.

"The A400M is well positioned to replace a major part of the current worldwide fleet of tactical transport aircraft," said EADS co-chief executives Philippe Camus and Rainer Hertrich in a statement.

The plane will rival heavy-lifters made by Boeing and Lockheed Martin and provide Europe with an independent means of deploying troops and equipment to conflict zones.

The A400M is expected to generate 40,000 jobs over 20 years.

Airbus is 80% owned by EADS, with BAe Systems owning the remaining 20%.

Rapid reaction

The German parliament's budget committee gave the go-ahead for the purchase of 60 planes last week, clearing the biggest obstacle to the deal going ahead.

Italy and Portugal pulled out of the project, and Germany is ordering fewer planes than initially planned for budgetary reasons.

Airbus said it was also in talks with other "major" customers.

Europe's inability to move troops and equipment into war zones was highlighted during the 1999 Kosovo conflict, when European armies were often forced to rely on the US for transport.

The A400M will also be the transport backbone of Europe's rapid reaction force, which is being created independently of Nato.

The first planes are due to be delivered in 2009.