Ryanair has signed a deal with Boeing to buy 175 new Next Generation 737-800 airplanes.

The airline said that when finalised, the deal will be worth nearly $15.6 billion at current list prices.

However, it is believed that Ryanair will pay much less for the planes.

Ryanair said the purchase will allow its airline to grow to more than 400 airplanes, serving more than 100 million passengers a year across Europe by the time all the planes are delivered in 2018.

It added that the deal is the largest ever aircraft order from a European airline.

The agreement was signed by Ryanair chief executive Michael O'Leary and Boeing Commercial Airplanes President and CEO Ray Conner in New York today.

About 75 of these new aircraft will replace some of Ryanair's existing fleet of 305 Boeing 737s, but Ryanair said the remainder will drive new growth of its fleet of ''young, highly efficient airplanes''.

See how Ryanair shares performed in Dublin trade here

The new planes ''provide Ryanair with the additional capacity to exploit substantial growth opportunities that currently exist as many of Europe’s flag carrier and smaller airlines are restructuring and reducing their short-haul operations,'' commented Micheal O'Leary.