Īustralia ordered four AEW&C aircraft with options for three additional aircraft, two of which have since been taken up. Radar signal processing equipment and central computer are installed directly below the antenna array. In addition, the radar antenna array is also doubled as an ELINT array, with a maximum range of over 850 km at 9,000 metres (30,000 ft) altitude. The radar is capable of simultaneous air and sea search, fighter control and area search, with a maximum range of over 600 km (look-up mode). The electronically scanned AEW and surveillance radar is located on a dorsal fin on top of the fuselage, dubbed the 'top hat', and is designed for minimal aerodynamic effect. It uses the Northrop Grumman Electronic Systems Multi-role Electronically Scanned Array (MESA) radar. The 737 AEW&C is roughly similar to the 737-700ER. In 1999, Australia awarded Boeing Integrated Defense Systems a contract to supply four AEW&C aircraft with options for three additional aircraft.

In 1996, Australia issued a request for proposal (RFP) for the aircraft for the RAAF under Project Wedgetail, which refers to the indigenous eagle. Further studies led to the approval of the first phase of Project AIR 5077 in 1994.

The Australian Department of Defence evaluated industry proposals for airborne surveillance and early warning systems as early as 1986.

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