A Voyager A330 will go through a £10 million refit for the job, but the government claims that the move could save up to £775,000 a year, as the RAF plane would be cheaper than chartering flights.
Similar plans to buy two private jets for ministers were scrapped by by Gordon Brown when he became Prime Minister, which were drawn up by his predecessor Tony Blair.
No timeline is yet in place for the plane, but more details are expected to be confirmed at the Strategic Defence and Security Review on 23 November.
A government spokesperson said: "As part of the government's defence review, we have been looking at ways to make better use of the RAF fleet to transport senior ministers and consequently deliver savings for taxpayers.
"We have decided to adapt one of our existing Voyager aircraft so that, in addition to its primary air tanking role, it can transport Ministers and it will also be available for the Royal family to use."
The Scottish National Party’s Stewart Hosie has responded saying there needs to be ‘absolute transparency’ to ensure that tax-payers get the best deal.
