Feb 4 (Reuters) - Railroad operator Union Pacific ( UNP ) and locomotive parts maker Wabtec signed an agreement worth $1.2 billion to ‌modernize the railroad's AC4400 locomotives, the ​companies said on Wednesday.

The agreement, which ‍the companies call "the largest ⁠locomotive ⁠modernization investment in rail industry history," is ‌aimed at starting ​deliveries from 2027.

The U.S. has been ramping up ⁠its rail fleet ‍replenishment ​using infrastructure investments made under the Biden administration, as operators ‍replace aging locomotives with more fuel-efficient, digitally enabled models.

The fleet upgrade is expected to reduce fuel consumption by over ​5%, ‍increase the locomotives' tractive effort by 14% and improve ​reliability by 80%, according to the companies.

Union Pacific ( UNP ) will have more than 1,700 modernized locomotives in its fleet on completion of the ​order, which marks its fourth modernization agreement with Wabtec.