British Airways is exercising options on 20 Airbus A320neos originally placed by its parent company International Airlines Group.
The UK flag-carrier already operates 120 single-aisle Airbus jets.
IAG placed a large order for up to 120 A320-family aircraft last year including a batch for budget operator Vueling. That agreement included 100 options.
Airbus says the exercised options in the latest deal will enable BA to replace 21 short-haul jets.
BA has not given an engine selection for the aircraft.
Airbus has secured over 2,800 firm orders for the A320neo, which is available with either Pratt & Whitney PW1100G or CFM International Leap-1A engines.