Boeing Co. (NYSE: BA) has a candidate for the $40 billion race to provide airborne refueling for the Air Force, its KC-767 Advanced Tanker.

Boeing said Monday that the plane is a modified version of its 767-200 long range freighter plane. It would be built at Boeing's aircraft plant in Everett Wash, where the commercial versions of the plane have been built.

This KC-767 Advanced Tanker will support more than 44,000 American jobs and 300 suppliers, said Mark McGraw, vice president of Boeing Tanker Programs in a statement.

The plane's competition is a defense contracting team made up of Northrop Grumman Corp. and EADS. Last week, the companies said their entry would be a modified version of the Airbus A330 jet.

Both teams are competing to replace the Air Force's the aging KC-135 jets, which have been in service for over 50 years.

The Air Force submitted its request for bidders in late January and says the refueling tanker program is its number one acquisition priority.

Shares of Boeing dropped 97 cents, or 1.09 percent to $89.02 in Monday afternoon trading on the New York Stock Exchange.