Sweden's Saab edged out French and US rivals to win a multi-billion-dollar contract to supply Brazil's air force with 36 new fighter jets, Defense Minister Celso Amorim said Wednesday.

Saab's Gripen NG was in competition with the Rafale made by France's Dassault company and US aviation giant Boeing's F/A-18 fighter for the long-deferred FX-2 air force replacement program

"After analyzing all the facts, President Dilma Rousseff directed me to inform that the winner of the contract for the acquisition of the 36 fighter jets for the Brazilian Air Force is the Swedish Gripen NG," Amorim told a press conference.

He put the actual value of the contract, earlier estimated at $5 billion, at $4.5 billion as Saab offered the cheapest price.

"We are a peaceful country, but we will not remain defenseless," Rousseff said on the presidential palace's blog.

"It is important to realize that a country the size of Brazil must be ready to protect its citizens, its resources, its sovereignty.(...) We must be ready to deal with any threat," she added,

The announcement came after more than 10 years of discussions and repeated delays due to budgetary constraints.

It came as a surprise, as experts were forecasting a Dassault-Boeing duel.

Amorim said the Gripen, a state-of-the-art, multi-role fighter, got the nod based on performance, assurances of full technology transfer and overall costs.

The Swedish aircraft, which was favored by the air force brass, is capable of performing an extensive range of air-to-air, air-to-surface and reconnaissance missions.

It can carry up to 6.5 tons of armament and equipment.

Munitions include various missiles, laser-guided bombs, and a single 27 mm Mauser BK-27 cannon.

The Gripen is in use in the air forces of Britain, South Africa, the Czech Republic, Thailand and Hungary.

Rousseff had postponed a decision on the FX-2 replacement contract in early 2011 for budgetary reasons but air force chiefs made it clear that it was an urgent matter.

The air force said the new fighter aircraft were needed to maintain an adequate air defense as it is to retire its 12 Mirage jets in late December.

Brazil bought the refurbished Mirage 2000 C/Bs from France in 2005 for $80 million to fly for five years.

A key requirement for the sale was technology transfers so that the planes can be assembled in this country and give a boost to the domestic defense industry.

Amorim said negotiations with Saab would take 10-12 months, with the signing of the contract expected at the end of next year and delivery of the first aircraft 48 months later.

The defense minister said Brazil's top plane maker Embraer "will benefit greatly" from the deal.

The G1 news website quoted Air Force spokesman Marcelo Damasceno as saying the Gripen jets "will meet the operational needs of the Air Force for the next 30 years."

Wednesday's announcement was a major blow for Dassault which has so far failed to export the Rafale.

French President Francois Hollande personally lobbied for Dassault's plane during a state visit to Brazil last week.

Brazilian press reports said Rousseff was leaning toward the F/A-18 but recent disclosures of extensive US cyberspying on Brazil dashed Boeing's hopes.

In 2009, then president Luiz Inacio Lula da Silva had expressed a preference for the Rafale but later backtracked and left the choice to his successor Dilma Rousseff.

A source close to Dassault in Paris said the Rafale was the most expensive among the three aircraft in contention.

"There is a prototype of the Gripen NG, which already has 300 hours of flight," said Brazilian Air Force Commander Juniti Saito.

"We are going to develop the plant jointly with Sweden. with Saab, to have 100 percent of the plane's intellectual property," he added.

"Within the Air Force, the Gripen was always seen as the favorite because, even though it has many US-made components, it is a project that will be developed jointly with Brazil," the daily O Estado de Sao Paulo said.