SYDNEY, Aug 21 (Reuters) - New Zealand said on Thursday

it would spend NZ$2.7 billion ($1.6 billion) to buy five MH-60R

Seahawk helicopters and two Airbus A321XLR aircraft,

the first major investment following a decision to replace the

country's aging defence fleet.

NZ$2 billion will be used to buy the maritime helicopters,

manufactured by Lockheed Martin's ( LMT ) Sikorsky unit, and

NZ$700 million for the A321XLRs, Defence Minister Judith Collins

and Foreign Minister Winston Peters said in a joint statement.

Both investments are part of the planned commitments

outlined in April in the government's Defence Capability Plan.

New Zealand in April pledged to boost its defence spending

by NZ$9 billion over the next four years, and aim to nearly

double spending to 2% as a share of GDP in the next eight years

as part of the Defence Capability Plan.

"We will now move at pace to procure helicopters directly

through the United States' Foreign Military Sales programme

instead of going to a wider tender, with cabinet expected to

consider the final business case next year," Collins said.

The two new Airbus aircraft, set to replace the Boeing 757

planes, will be acquired on a six-year lease-to-buy arrangement.

The New Zealand Defence Force's two 757s are more than 30

years old and their age has made them increasingly unreliable,

breaking down several times and stranding the nation's leaders,

forcing them to take commercial flights.

"This decision will ensure New Zealand has a critical combat

capable, interoperable and dependable fleet," Collins said.

The government's investment decisions showed it was

responding to "the sharply deteriorating security environment,"

Peters said.

"Global tensions are increasing rapidly, and we must invest

in our national security to ensure our economic prosperity," he

added.

An intelligence report released on Thursday said New Zealand

was facing the toughest national security challenges of recent

times with increasing threats of foreign interference and

espionage, particularly from China.

($1 = 1.7170 New Zealand dollars)