IAG will convert options for 12 A320neo family into firm orders. It also plans to place an order a further 25 A320neo aircraft, which will include options for another 50.
The group said the new short-haul aircraft would replace outgoing Airbus A320ceo models.
The new aircraft are due for delivery between 2025 and 2028, with the split between A320neos and A321neos "to be determined nearer delivery".
The order is yet subject to approval by IAG shareholders. IAG is also parent to Aer Lingus, Iberia, Vueling and Level.
IAG said the order for the more fuel-efficient aircraft formed part of its plan "to meet climate commitments".
It follows orders earlier this year for 25 Boeing 737-8 aircraft and 25 Boeing 737-10 aircraft, with an option for another 100.
In addition, IAG lsat month announced it had converted separate options for 22 Airbus A320neo family into firm orders for 17 A320neos and five A321neos.
"In line with the group’s strategy to return fleet capacity to 2019 levels and replace end of life aircraft, a number of new aircraft orders have been announced in the period," said IAG in a six-month trading update on Friday (29 July).
"These orders for modern, more fuel-efficient aircraft can be used for any airline in the group and will bring both cost efficiencies and environmental benefits to IAG’s airlines."
