Saab's B share, which represents around 50 percent of the company's capital, was up by 23.83 percent in early trading on Stockholm's stock market. The increase generated a 2.15 billion kronor ($330 million) surge in the company's market value. The shares had opened with a 30.17 percent rise.
"I am extremely proud of the confidence that the Brazilian government has placed in Gripen NG ... the world-leading and most affordable fighter," Saab chief executive Håkan Buskhe said in a statement.
The Gripen is Saab's flagship product and the company's largest bet for the future.
The three finalists in the long-deferred FX-2 air force replacement program were the Rafale made by France's Dassault company, US aviation giant Boeing's F/A-18 fighter and Swedish maker Saab's Gripen.
"After analyzing all the facts, President Dilma Rousseff directed me to inform that the winner of the contract for the acquisition of the 36 fighter jets for the Brazilian Air Force is the Swedish Gripen NG," Brazilian Defence Minister Celso Amorim told a press conference on Wednesday.
The announcement came after more than ten years of discussions and repeated delays due to budgetary constraints.
The Gripen, which was said to be the cheapest of the three aircraft, is capable of performing an extensive range of air-to-air, air-to-surface and reconnaissance missions. It is in use in the air forces of Britain, South Africa, the Czech Republic, Thailand and Hungary.
In 2009, then president Luiz Inacio Lula da Silva expressed a preference for the French Rafale but later backtracked and left the choice to his successor Dilma Rousseff.
The air force said it needs the new fighter aircraft to maintain an adequate air defence as it is to retire its twelve Mirage jets in late December. Brazil bought the refurbished Mirage 2000 C/Bs from France in 2005 for $80 million to fly for five years.
Brazil is also seeking technology transfers so that the planes can be assembled in this country and give a boost to the domestic defence industry.
Rousseff postponed a decision on the FX-2 replacement contract in early 2011 for budgetary reasons but air force chiefs have insisted that it is an urgent matter.