The Chilean government had an ongoing need for a new combat aircraft. After a protracted selection process, on December 27, 2000 the government announced that the F-16C/D Block 50 had been selected.
On February 1, 2002, the commander in chief of the Chilean Air Force signed a letter of acceptance with Lockheed Martin for ten advanced Block 50 F-16C/D aircraft, to be powered by General electric F110-GE-129 IPE engines. Derived from the Block 50+ configuration intended for Greece, the aircraft will ahve the AN/APG-68V(9) radar, an advanced electronic warfare package, and will be able to carry conformal fuel tanks. Six of them will be Cs and four will be Ds. The two-seat Ds will be fully combat capable and will feature the "large spine" fitted to Israeli and Singapore F-16Ds. They will be equipped with the Joint Helmet-Mounted Cueing System, and will have Rafael Litening II targeting pods.
It is not known what weapons the Chilean F-16s will carry. The US government is reluctant to release the AMRAAM to regions where a similar level of threat does not exist, but it is known that Peru's MiG-29s are equipped with the R-77. Chile has said that the delivery of the AMRAAM is an integral part of the deal and that the aircraft will not be purchased unless these missiles are made available. Perhaps Chile will adopt the Israeli-built Rafael Derby missile for its F-16s.
The Chilean F-16 deal is a commercially-funded deal and not an FMS transaction, and it is not certain how Chile is going to be able to pay for these planes.