The planes will be built at Jacksonville International Airport and will create 50 jobs.
The more than $427 million contract has a ceiling of $950 million and includes the 20 light-air support aircraft, its pilot training program and all maintenance and supplies.
As reported, the Jacksonville Aviation Authority issued a building permit in December to renovate the former Piedmont hangar, a step an authority spokesman said was in anticipation of the Air Force contract decision.
Build-out of the 41,574-square-foot S-11 hangar had a project cost of $750,000.
Sierra Nevada Corp., based in Sparks, Nev., and Embraer, based in Brazil, were awarded a $355 million U.S. Department of Defense contract in December 2011 to build the planes, but Wichita, Kan.-based Hawker Beechcraft filed suit against the government after it was eliminated in the bidding.
In response, the Air Force put the deal on hold and then set it aside in February 2012 and reopened bids for the two companies.
The announcement that Sierra Nevada and Embraer was awarded the contract was made Wednesday.
"The Light Air Support program is essential to the United States' objectives in Afghanistan and to our national security. It is a great honor to serve our country by providing the aircraft, training and support for this program," said Taco Gilbert, vice president of integrated tactical solutions for Sierra Nevada's intelligence, surveillance and reconnaissance business area, in a news release.
Mayor Alvin Brown said in a statement the award was "great economic news for Jacksonville" and reaffirmed the city's military- and business-friendly stature. Brown joined Gov. Rick Scott on an economic development trip to Brazil in October 2011 and met with Embraer officials.
U.S. Rep. Ander Crenshaw also lauded the contract decision.
"This contract underscores the deep confidence by our military that Jacksonville continues to be a military aviation center of excellence," Crenshaw said in a statement.
City Council approved an incentives package for Embraer in January 2011 for the 50-job project. The deal required jobs to be created by Dec. 31, 2012, but the City and state can extend the agreement.
The approved package includes a $150,000 Qualified Target Industry Tax Refund, with $30,000 from the City and the remaining $120,000 from the state. It also was contingent on the company receiving $400,000 from the Governor's Quick Action Closing Fund and $100,000 from the Quick Response Training, which did not need City approval.
After a prolonged legal battle, Sierra Nevada Corp. and Embraer were awarded a $427 million contract to build 20 A-29 Super Tucano warplanes in Jacksonville, the U.S. Air Force announced Wednesday.