More than 60 percent of the Central American country's national budget goes to military-related expenditures but, in this case, funds may be provided as loans by Chile or the United States, or both, defense news media said. Details of the financing were not discussed.
The deal is said to be worth about $8.6 million and includes the 10 aircraft and spare parts, infodefensa.com, Air Forces Monthly and Chiledefense blog said.
The Dragonfly is more than 50 years old and was produced between 1963 and 1975. About 577 of the A-37, developed from Cessna T-37 Tweet, were produced during that period but it's not clear how many survive.
The Chilean air force retired most of its Dragonfly aircraft in 2009 and had been looking around for buyers since then. The U.S. Air Force has retired most of its A-37s but the Peruvian air force still operates some of about 18 A-37s in its inventory.
Ten were upgraded with U.S. help as part of international assistance to the country's anti-narcotics program. South Korea donated eight A-37s to the country.
The Dragonfly was one of the light attack aircraft used during the later part of the nearly 20-year Vietnam war, so analysts received the news with surprise, as the deal is likely to push aside a contract being discussed for Brazil's Super Tucano light attack aircraft. The modern Brazilian attack plane is at least 10 times more expensive.
El Salvador continues to operate some of an estimated eight A-37s supplied by the United States during its 1979-1992 civil war to help the government beat an insurgency.
Salvadoran President Mauricio Funes reported plans for the purchase during Soldier's Day celebrations in May that marked the 189th anniversary of the creation of the Salvadoran Armed Forces.
The deal rules out "at least temporarily, the newer Brazilian light attack fighter Super Tucano, the most novel and optimal operating aircraft in terms of investment per flight hour," infodefensa.com said.
The purchase works out to about $860,000 per aircraft, dialogo-americas.com said on its website.
"If the loan is approved, this fleet will strengthen our Air Force, which has not been properly supported in recent decades," Funes said during the May 6 speech at the Military School in San Salvador.
"We are submitting this request to the honorable Legislative Assembly in due time. Congressmen and congresswomen know that the Armed Forces, particularly the Air Force, will be thankful," Funes said.
Salvadoran National Defense Minister Major General Atilio Benitez said he discussed purchase with his Chilean counterparts at the Central American Armed Forces Conference in Uruguay.
"We have these same aircraft and with this (the addition of Chilean equipment), we are strengthening the force; further, a stock of spare parts is included, which might be useful for some of our non-operational equipment," Benitez said.
Benitez did not rule out that this addition might balance out -- though not entirely in favor of El Salvador -- the difference in air power between his country and its regional neighbors, whose forces surpass Salvadoran ones, dialogo-americas.com said.
The purchase would set aside an earlier initiative to buy 10 new Brazilian Embraer EMB314/A29 Super Tucano light attack fighters at $10-$12 million each, the website said.
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