The insurer said the deal would cover about 22,000 pensioners in the largest ever bulk annuity policy arranged with a UK pension scheme.
The company has completed £6bn of global pension de-risking transactions in the year to date. That includes £5.3bn of pension risk transfers (PRT) in the UK and £400mln of international PRTs.
"As we indicated at the half year results, the second half of 2018 is likely to be a record six months for our PRT business and we expect to announce further transactions in the next few months," said chief executive Nigel Wilson.
"We are actively quoting on £27bn of UK PRT deals demonstrating the strong demand for insurance, supported by increasing affordability, as trustees seek to improve security for members and companies look to remove legacy liabilities."
British Airways, owned by International Consolidated Airlines Group PLC (LON:IAG), is one of many UK companies trying to address large pension deficits. The L&G deal will cover about 60% of the airline’s pensioner liabilities.
Virginia Holmes, chair of the British Airways sponsored Airways Pensions Scheme, said: "This transaction is the latest in a number of insured arrangements entered into by the Airways Pension Scheme. It demonstrates the vision and determination of the trustee to reduce risk and increase security for members. Today's announcement is the culmination of much hard work undertaken over several months and we are pleased to be taking this significant step in the Scheme's de-risking journey."
In morning trading, shares in L&G rose 0.4% to 252p.