India's flagship carrier Air India on Wednesday signed a landmark agreement with the American aerospace giant Boeing Commercial Airplane for the purchase of 68 aircraft at an estimated cost of Rs 35,000 crore (Rs 350 billion).

The agreement was signed between Air India chairman V Thulasidas and Boeing Commercial Airplane president and CEO Alan Mulally at the Air India office in south Mumbai.

Air India's order consists of 23 Boeing 777s and 27 Boeing 787-800 dream liners, AI sources said.

Air India Express, a wholly owned subsidiary of Air India will receive 18 Boeing 737-800s, it added.

The move follows the decision of empowered group of ministers to clear the Air India's proposal of aircraft purchase, the largest ever by an Indian carrier, after securing a financial discount of about Rs 1,000 crore (Rs 10 billion).