At a news conference Tuesday at the Toulouse airport attended by British Prime Minister Tony Blair and French transport minister Jean-Claude Gayssot, Airbus President Noel Forgeard called the sale "a most remarkable event in Airbus history."
British Airways, which Forgeard called "a very seasoned and demanding customer," will buy 59 short-haul jets in the A320 family and has options to buy another 129.
The list price of the new aircraft BA is ordering comes to 3 billion pounds ($5 billion), although the company did not disclose the exact price it is paying.
While most European airlines have bought from Airbus, a consortium made up of aerospace companies from Britain, France, Spain and Germany, British Airways has long been one of Boeing's most loyal customers.
BA chief executive Bob Ayling acknowledged the deal would disappoint Boeing.
"I know Boeing, being the company they are, will come back," he told reporters before the news conference.
Asked if he thought choosing a European supplier would help BA get European Union approval for its controversial alliance with American Airlines, Ayling indicated the decision was purely commercial.
"I don't think it will make any difference," he said. "British Airways bought these aircraft because they offered us the best value."
Despite the partial defection to Airbus, British Airways said it still plans to fly lots of Boeing aircraft, keeping the Seattle-based company as its supplier for larger jets.
In a statement, the airline said it will buy 16 Boeing 777s, with options for 16 more.
"We never like to lose any campaign, but this was hard-fought and one we knew would be difficult from the beginning," Boeing spokeswoman Janice Hayes in Brussels said of the Airbus order. "Airbus won half a victory."
Hayes said the British Airways move would not result in any job losses at Boeing.
The big British airline has never purchased any airplanes directly from Airbus, although it now has 10 in its fleet that came with the acquisition of a smaller airline several years ago.
Written by Dirk Beveridge