British Prime Minister David Cameron welcomed the move, calling the deal a "testament to Britain's leading aerospace industry" which will safeguard "thousands of jobs across the U.K."
BAE said Oman has signed the contract for 12 Typhoon fighter jets and eight Hawk aircraft, with deliveries expected to start in 2017.
The contracts cover the supply of the aircraft and in-service support, BAE added, saying the deal supports its strategy to grow its international markets and export business.
The deal is the latest in a series of contracts to Oman for BAE: the country currently operates Jaguar fighter aircraft and trains pilots on an earlier variant of the BAE Systems Hawk, the defence giant said.
The deal will make the Gulf nation the seventh country to use the Eurofighter Typhoon jet, which is built by a consortium of European aerospace companies.
Last month, Britain's prime minister on a tour of the Middle East sought to spur British arms sales. He visited Dubai and Abu Dhabi, where he sought to persuade the United Arab Emirates to buy Typhoons instead of French fighter jets.
On Friday, he dismissed concerns about U.K. arms to the Gulf region, saying boosting exports is vital for Britain's economic growth.
"Every country in the world has a right to self-defence and I'm determined to put Britain's first-class defence industry at the forefront of this market," he said.