The Government has reached an agreement on completing the delayed upgrade of the Air Force C130 Hercules aircraft, says Defence Minister Wayne Mapp, and most of the work will be done in New Zealand.

Under the deal with American company L3 Communications, two aircraft will be returned to the Air Force for testing and evaluation by the end of the year.

The upgrade of the C130s includes refurbishment of the centre wings and other structural components, a rewire and replacement of avionics systems, flight measurement, autopilot and navigation and communication suites.

Dr Mapp said he would now focus on the contracts for the purchase of helicopters and the P3 Orion upgrade.