UK sells 72 retired Harrier jump jets for $180m to US
Mr Luff told parliament: "We have agreed the sale of the final 72 Harrier aircraft frames and associated parts which will be used as a major source of spares for the US Marine Corps Harrier AV-8B fleet of aircraft."
The deal represented "a good deal both for UK taxpayers and the US government," he said.
Mr Luff said that adding the savings made from retiring the Harrier fleet, their sale saved the UK about £1bn.
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Mr Luff said that Harriers had served the UK "with great distinction" but retiring them "eight years earlier than planned was the right decision".
He said: "Had we taken the decision in the SDSR to decommission Tornado instead we would not have been able to carry out the missions that were required simultaneously in Libya and Afghanistan.
"It was essential to retire older, less capable aircraft to allow us to invest in more modern, cutting-edge fast jets.
"As our operations over Libya proved, we have the capability to project decisive air power and can utilise our extensive basing and over-flight rights to great effect."