The International Business Machines Corp. will modernize the air traffic control computer equipment under a $3.6 billion contract, the Transportation Department says.

The Advanced Automation System is expected to be available in the late 1990s, the department says. The system is designed to provide controllers with more modern computer capacity and flexibility to handle increased air traffic loads.Word of the contract being awarded to IBM came in a one-sentence announcement. Department spokesman Bob Marx said details of the contract would be disclosed Tuesday at a news conference.

The contract represents one of the largest portions of the $16 billion air traffic control modernization program, which has been under way for several years and is expected to be completed around the turn of the century.

IBM's Federal Systems Division competed with Hughes Aircraft Co.'s Ground Systems Group for the contract to provide equipment that will replace the Federal Aviation Administration's outdated computer system.