China's Xiamen Airlines is ordering 40 Boeing 737s which will be delivered to the carrier from 2016.
Xiamen is 51%-owned by China Southern Airlines, which disclosed the agreement in a statement to the Hong Kong stock exchange.
Deliveries of the jets will continue to 2019, it says.
China Southern says that the catalogue price of the 40 aircraft is $3.36 billion.
"The aggregate actual consideration for the Boeing aircraft, which is payable in cash, and determined after an arm's length negotiation between the parties, is significantly lower than the catalogue price," the carrier adds.
Neither China Southern nor Xiamen Airlines has provided details as to the variant of 737 selected, nor indicated whether any of them are the re-engined Max version which becomes available in 2017.