An RAF Voyager A330 will be transformed into an Air Force One-style jet, allowing the PM to travel in style and security on long-haul flights. The conversion is reported to cost around £10 million.
The aircraft, which will also be available for the Royal Family to use, is expected to carry 160 passengers and have secure communication links, according to the Times.
It will also be equipped with missile detection technology, permitting it to fly over warzones where normal airlines cannot travel.
The VIP jet could be in service as early as next year.
Cameron and Osborne will announce the move as part of a security and defense review on Monday.