The Royal Australian Air Force (RAAF) is spending more than $90 million to convert luxury corporate jets into state-of-the-art spy planes.

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The ABC has learnt the high tech surveillance aircraft are due to come into service at the end of next year.

A brief statement posted on the US Defense Department website confirms the project.

"L-3 Communications Mission Integration, Greenville, Texas, has been awarded a $93,632,287 firm-fixed price undefinitised contract action task order (1648) for Australia Government G550 aircraft procurement and maintenance," it said.

"Work will be performed at Greenville, Texas, and is expected to be complete by Nov. 30, 2017.

"This contract is 100-per cent foreign military sales to Australia."

Peter Jennings from the Australian Strategic Policy Institute said he is not surprised the RAAF has chosen the option.

"Turning this aircraft from a business jet into something that can potentially be used for surveillance and electronic information gathering and I suspect that's the major intent behind this," he said.

The G550 is a luxury corporate jet boasting the ability to fly more than 12 hours nonstop, and over 12,000 kilometres.

It is powered by two Rolls Royce engines, can carry up to 18 passengers and operates out of short-field, high-altitude airports, meaning it could spy on remote and difficult locations such as Afghanistan.

Australia's current P3 maritime surveillance aircraft are due to retire in 2018, and will be eventually be replaced by the P8 Poseidon and Triton.

"The Gulfstream is smaller, faster, takes fewer crew so it's cheaper to operate," Mr Jennings told the ABC's PM program.

Already several militaries across the globe are using G550s for intelligence gathering but full details of Australia's contract are not expected to be known until the release of this year's long-awaited defence white paper.

The Australian Defence department is yet to respond to questions about the military contract.