South Korea picked U.S. aerospace giant Boeing Co. (BA.N) to supply four early-warning surveillance planes for 1.6 trillion won ($1.71 billion) by 2012, the defense ministry in Seoul said on Wednesday.

A South Korean defense procurement commission selected Boeing's 737 Airborne Early Warning and Control aircraft for the project, the ministry said in a statement.

"Today the commission tabled and voted on the proposal to select Boeing's 737 for the Airborne Early Warning and Control project," the ministry said.

The introduction of the reconnaissance aircraft is aimed at boosting South Korea's response to changing strategic dynamics on the Korean peninsula, the ministry said.

South and North Korea remain technically at war under a truce that ended the 1950-53 Korea War.

Political ties have warmed between them in recent years although military tension remains high and ratcheted up further after the North tested a nuclear device on October 9.

South Korea is poised to take over wartime command control over its 670,000 troops from the United States some time in the next six years.

The United States has about 30,000 troops in the country to deter possible North Korean aggression.

South Korea in August dropped Israel Aircraft Industries Ltd from the competition, leaving Chicago-based Boeing as the only bidder, but the government said at the time that it would abandon the deal if Boeing's terms were not to its liking.