Signed in the central city of Deblin in the presence of Polish Prime Minister Leszek Miller, the accord involves US promises of billions of dollars of investments.

"It's the contract of the century," Defence Minister Jerzy Szmajdzinski said at the signing ceremony.

Poland needs the planes to come up to the standards of the NATO military alliance which it joined in 1999.

The deal is eastern Europe's biggest defence procurement yet and followed a tough competition between US and European defence giants.

"This event is the expression of the Polish-American partnership, not only in the political and military sense, but also in economic terms," Miller said after the contract was signed.

"It's good news for the Polish air forces, for the Polish economy, for the future of our country," the prime minister said.

Under the terms of the agreement, the first 16 planes will be delivered to Poland in 2006 and their payment will be due from 2010.

Lockheed Martin snared the contract in December, beating bids from British-Swedish consortium BAE Systems-SAAB with its Jas-39 Gripen and France's Dassault Aviation with its Mirage 2000-5.

The deal drew criticism from European Union countries that thought a member-in-waiting should have given its business to an EU company.

Poland and nine other candidates on Wednesday signed accession treaties to the 15-state bloc and are due to join on May 1, 2004.

Friday's signing of the Lockheed Martin contract was the fruit of long wrangling over the value of compensatory, or offset, investments in Poland.

Miller said the basic value of the investment package would be six billion dollars, but the value could end up being higher.

But according to a statement from the economy ministry and Lockheed Martin reported by the PAP news agency, the accord provides for a compensatory investment programme of more than 12 billion dollars.

The 12-billion figure appeared to be based on the estimated long-term benefits of the investments.

The investment projects will be carried out over 10 years from 2003, the statement says.

The signature of the accord at the Polish aviation academy was broadcast live on Polish television.

It was signed by Defence Minister Jerzy Szmajdzinski, Finance Minister Grzegorz Kolodko and Economy and Works Minister Jerzy Hausner for Poland, and for the United States by General Tome Walters and Lockheed Martin vice presidents Martin Larry McQuien and Bob Trice.

SPACE.WIRE