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The Massachusetts Department of Transportation board of directors approved a $222.2 million contract Monday that will replace a fleet of 325 MBTA buses by June 2017.

The new 40-foot, low-floor, hybrid and compressed natural gas buses will replace a current MBTA fleet approaching the end of its 12-year expected service life. New Flyer Industries Inc., the Canada-based contractor of the buses, predicts delivery will begin in July 2016, according to a statement from MassDOT. The MBTA will review and inspect a pilot bus before the full fleet is manufactured and delivered.

“This is a wise investment that meets an urgent need to retire an aging portion of our bus fleet that has presented significant maintenance challenges and deliver new, top-quality replacements that will serve thousands and thousands of our customers each day,” MBTA interim General Manager Frank DePaola said in the statement.

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Eighty percent of the contract will be funded by federal funds. The other 20 percent will be funded by MBTA revenue bond funds already included in the agency’s capital investment plan.

MassDOT Secretary Stephanie Pollack said that while the contract serves as a “major step” in the MBTA’s modernization, the Legislature should also support Governor Charlie Baker’s proposed reforms.

“Delivering the reliable, world-class service that they [commuters] and the taxpayers deserve will also require the Legislature delivering the administration the tools we need to reform the underlying management and financial operations at the MBTA for long-term sustainability,” she said in the statement.


Felicia Gans can be reached at felicia.gans@globe.com. Follow her on Twitter @FeliciaGans.