Boeing is pinning its hopes on the 7E7 jet

GE and Rolls-Royce will supply next-generation versions of existing engines , called GENX and Trent 1000.

The 7E7 Dreamliner is expected to use 20% less fuel than other midsize jets.

It is the US firm's latest attempt to fight off the challenge from European rival Airbus in the intercontinental jetliner market.

Both engine types will use the same standard interface with the aeroplane, allowing them to be used on any of the three different versions of the 7E7 twinjet.

'Significant decision'

"Our engine for the 7E7 represents the culmination of new technologies for which GE has made considerable investments over many years," said David Calhoun, president and CEO of GE Transportation.

Mike Terrett, the president of Rolls' civil aviation arm, said the deal would help the firm gain a large slice of a multi-billion dollar market.

"For engine sales in this sector, we see a requirement of 3,000 aircraft over 20 years, and the total value for installing spare engines for those aircraft would be in excess of $100bn," he told the BBC's World Business Report.

"We expect, and anticipate getting, a good share of those engines."

Although smaller than Boeing's existing 777 and 747 jet, the new aircraft will be able to carry 200 to 250 passengers on flights of up to 8,300 nautical miles.