Stockholm-based Saab, maker of the Gripen fighter jet, said the order's potential value was $1.018 billion although final negotiations had yet to take place and a contract amendment needed to be signed.
The UAE previously bought three GlobalEye aircraft, which provide simultaneous air, maritime and ground surveillance. It bought two in 2015 and another in 2017.
Saab said the Gulf state announced its intention at the Dubai Airshow on Tuesday to amend the contract.
The Swedish company raised 6 billion crowns ($624 million) last year to boost its balance sheet and meet a growing order backlog.
Saab's shares were up 2.7% by 1122 GMT.
(Reporting by Helena Soderpalm; Editing by Edmund Blair)
