Minister of Defence Antti Kaikkonen (Cen) announced on Friday that Finland will procure 64 new F-35A Lightning II fighter jets from US manufacturer Lockheed Martin to replace its ageing fleet of Hornet planes.
The announcement confirmed an earlier report by news agency Reuters.
Kaikkonen said that the long tendering process had ensured that Finland received the best possible deal and selection.
"The price-quality ratio is good," he said at an afternoon press conference, flanked by Prime Minister Sanna Marin (SDP) and military top brass. Military officials said that the F-35 had received by far the highest score in an internal evaluation process.
Marin said that the cabinet decision had been unanimous. She noted that the two Left Alliance ministers had sought a commitment that the projected price tag of 10 billion euros would not be exceeded. The planes themselves are to cost just under half of the overall package.
Kaikkonen said that an associated trade agreement will guarantee 4,500 person-years of employment in Finland, along with another 1,500 person-years of work indirectly.
The deal will bring an estimated 100 manufacturing and assembly jobs for Finnish defence contractor Patria in the towns of Jämsä and Nokia. The firm now has about 850 employees in the two locations.
He said that the new planes would operate and ensure Finnish security into the early 2060s. The first ones are to be delivered in 2026. Marin said the current Hornets would be phased out by around 2030.
By choosing Lockheed, Finland opted to remain with a US manufacturer, as it has for nearly three decades. In early 1992, just after the collapse of the Soviet Union, Finland decided to buy 57 F-18 Hornet fighter jets from US firm McDonnell Douglas.
Kaikkonen declined to respond specifically when asked whether the decision to buy more planes from the US was partly based on Finland's overall security strategy, saying that all of the bidders would have been in line with the strategy.
Like neighbouring Sweden, traditionally non-aligned Finland is a close partner of the US-led Nato alliance, but not an official member. The F-35 is used by many Nato members, including Nordic neighbours Norway and Denmark, Charly Salonius-Pasternak of theFinnish Institute of International Affairs told Yle.
The other options for the procurement had been Sweden's Saab, US rival Boeing, France's Dassault and Britain's BAE Systems.
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Earlier this week Swedish public broadcaster SVT predicted that the winning bid would come from Lockheed Martin, with Finland getting F-35 jets.
There has been a long tendering process for the planes, with five possible options but the American F-35 always the favourite.
Last year the Defence Ministry rebuked an ex-general for violating conflict-of-interest rules by working as a lobbyist for Lockheed Martin.
The public debate has focused on whether or not the allocated maintenance funding of 250 million euros per year will be sufficient to keep the planes in the air.
The newspaper Helsingin Sanomat reported earlier that ministers would meeting to confirm the decision on Friday.
18:07 Updated with details including Patria jobs.
TetraSys Oy.