Russian President Vladimir Putin, on an official visit to Kuala Lumpur on Tuesday, said the first of the 18 Sukhoi Su-30MKs will be delivered to Malaysia in 2006.
He added he hoped the deal would help Moscow sell more aircraft in southeast Asia.
"I think from this Malaysian platform, Russian aviation techniques can be moved to the region of southeast Asia," he said.
Military experts say the Su-30MK will be the most powerful combat aircraft ever operated by a southeast Asian country.
President Mahathir Mohammed
has territorial disputes with his
The Su-30MK's air-to-air missiles outrange all enemies and the aircraft has unusually powerful radar.
Russia has sold similar versions to China and India, and a less advanced version to Vietnam.
Indonesia is buying the aircraft, too.
Malaysian Defence Minister Najib Abdul Razak said palm oil sales would cover 30 percent of the bill for the planes, and 30 percent of the remainder would be offset by a transfer of technology to Malaysian firms.
Despite enjoying reasonably good relations with its neighbours, Malaysia has territorial disputes with all of them.