Boeing will offer the KC-767 Advanced Tanker for the U.S. Air Force's $40 billion aerial refueling tanker competition, the company said on Monday.
The aircraft will be a derivative of the future 767-200 Long Range Freighter and will be produced at Boeing facilities in Everett, Wash., Boeing said.
Australia has ordered the Airbus tanker and Britain has picked EADS as the preferred bidder in its competition.
The 767 has been modified into a refueling tanker for Italy and Japan.
The Air Force said it would consider both the value and capabilities of the bids, and a higher-priced bidder could win if its overall approach outweighed the cost. The Airbus A330 sells on the commercial market for about $160 million. Boeing's 767-200 sells for about $120 million.
The Air Force hopes to select a winner later this year.
Several U.S. government agencies found that an Air Force tanker program begun in 2001 was riddled with problems. In 2004, Congress killed a proposal for the military to lease and buy 100 Boeing 767 tankers.