SAO PAULO (Dow Jones)--Brazil has chosen the French Rafale jet for its fighter program and is in negotiations with Dassault Aviation SA (AM.FR) to buy 36 aircraft, the two governments said in a joint communique.

The deal could be worth $10 billion, although neither side would comment on the details.

According to French Finance Minister Christine Lagarde, the deal is part of a defense deal under negotiation that could be worth EUR12 billion.

Last year, Brazil signed contracts worth $12 billion to buy 50 EC-725 military transport helicopters and five submarines from France.

Speaking at an event in Sao Paulo, Lagarde said that an important part of these deals was the transfer of technology and the creation of strategic partnerships.

Dassault fought off U.S. rival Boeing Co. (BA) and Saab (SAAB-B.SK) of Sweden for the fighter contract. One of Brazil's main demands was the transfer of technology along with the planes.

The French helicopters will be assembled in Brazil, while, under terms of the latest accord, France could acquire cargo aircraft produced by Brazilian jet maker Embraer (ERJ). The cargo aircraft model is the KC-390 and is due to enter service in 2015.