The option is worth about $16.25 million and is for operational and technical support, equipment follow-up, modifications, updates and warehouse operations for replacement parts for the country's Gripen fighters, which were manufactured by Saab.
"With this order, Saab contributes to an effective and accessible Gripen operation for Sweden in the coming year," says Lars-Erik Wige, head of Saab's Support and Services business area.
Saab said the original contract from the Swedish Materiel Administration, issued in 2012, has options for additional work extending until 2016.
Work on the contract will be performed at company facilities in Linkoping, Arboga, Vaxjo and Ostersund.
The Gripen is a single-engine multirole aircraft with a maximum speed of 1,372 mph at high altitude and a combat radius of 500 miles.
In addition to Sweden, military forces of Hungary, South Africa and Thailand fly the aircraft.
Notable deaths of 2014 [PHOTOS]