"The proposed sale will improve Australia's capability to meet current and future threats by providing the Royal Australian Air Force with replacements for its aging cargo fleet, guaranteeing a reliable airlift capability," the Pentagon said in a statement.

The US State Department approved the possible sale, and the Defense Security Cooperation Agency on Wednesday provided the required notification to Congress.

Lawmakers need to sign off on the transaction, but that is likely to be a formality in this case.

"This proposed sale will support the foreign policy and national security objectives of the United States," the Defense Department statement said, adding that "Australia is one of our most important allies in the Western Pacific."