(Reuters) - Delta Air Lines said on Thursday it would buy 40 Bombardier two-class regional jets, with the option to buy an additional 30, in a deal valued at up to $3.29 billion.

The order for the 76-seat CRJ900 aircraft comes as Delta, the No. 2 airline behind United Continental , moves to retire smaller 50-seat jets that cost more to operate.

The orders were valued at $1.85 billion, with that rising to $3.29 billion should the options be exercised, Bombardier said.

Shares of rival Brazilian jet maker Embraer SA fell nearly 8 percent following the news. Delta had said in October that it was considering Bombardier and Embraer jets for the order.

Bombardier won its biggest jet deal of $7.8 billion from Swiss charter operator VistaJet for up to 142 global aircraft last month.

Delta's feeder carriers currently fly Bombardier 466 CRJ Series planes.

The Canadian aircraft and train maker's stock is trading at about 8 times analysts' expectations for 2012 earnings, according to Thomson Reuters data. By contrast, Boeing is at about 15 times forward earnings.

Bombardier shares were up 2 percent.

Benoit Poirier, a Desjardins analyst, said in a note to clients that the Delta and VistaJet deals were expected to bring Bombardier's regional aircraft backlog to a record level of more than $60 billion by the end of the fourth quarter.

"Additionally, we believe there is further momentum ahead for Bombardier's regional segments as Garuda (of Indonesia) is expected to place a large order for turboprops," Poirier wrote on Thursday. Longer term, he added, there could be opportunities for orders from regional carrier SkyWest and AMR Corp's American Airlines, which is currently restructuring under Chapter 11 bankruptcy.

Atlanta-based Delta has taken a number of moves to revamp its fleet used on U.S. routes with an eye to eliminating less-efficient planes and adding more first-class cabins that appeal to business passengers.

Earlier this year, it reached an agreement to add 88 Boeing 717-200 aircraft with 110 seats that are currently in use by Southwest Airlines' AirTran unit. Last year, Delta ordered 100 Boeing 737-900ER jets.

Delta said on Thursday it expects to start taking delivery of the Bombardier and Boeing planes in the latter half of 2013.

Shares of Delta were up 2.1 percent at $9.92 on the New York Stock Exchange in late morning trade.

(Reporting by Krithika Krishnamurthy in Bangalore, Brad Haynes and Cesar Bianconi in Sao Paulo and Karen Jacobs in Atlanta; Editing by Joyjeet Das and Leslie Gevirtz)