FREDERICTON — The federal government is expected to announce Wednesday a long-anticipated overhaul of the Canadian army's battered fleet of light armoured vehicles.

Defence Minister Peter MacKay is expected to make the announcement, which could be worth billions of dollars, during a stop at Canadian Forces Base Gagetown, N.B.

A Defence source told The Canadian Press that existing LAV-3s are to be upgraded with better armour and electronics and it's anticipated Ottawa will move forward with the purchase of the next generation of light armoured vehicle, known as the LAV-H.

The LAVs have been the army's principle fighting vehicle in Afghanistan, but have taken a beating, with many in need of a major overhaul by the time the combat mission ends in 2011.

Work on both vehicles is expected to go to General Dynamics Canada plants in London, Ont., and Edmonton.

"The LAV has been the heart and soul of the whole battle group concept in Afghanistan," said Marc Milner, director of the Gregg Centre for the Study of War and Society at the University of New Brunswick.

He said while the LAVs provide a great deal of flexibility for the Canadian army, no one ever expected to subject them to the kind of continuous rough conditions they're facing in Afghanistan.

"They've held up quite well, however they've been a huge drain on the logistics and maintenance of the Canadian army," Milner said Tuesday. "They're down to the point now where they have almost nothing to train on and all the spare parts are going to Afghanistan."

The army has also been asking for a close-combat vehicle, or mini-tank, for battle escort and a new armoured patrol vehicle to replace the RG-31 Nyalas.

There is speculation within defence circles that MacKay could also announce plans to purchase that equipment on Wednesday at the army's principle East Coast training base, although it's unclear when those vehicles would be delivered.

Unlike the LAVs, infantry fighting vehicles and armoured patrol vehicles -- essentially SUVs on steroids -- would have to be built outside of the country with only a portion of the work going to Canadian companies.

Milner said the army could use those vehicles sooner, rather than later.

"They would be quite useful now," he said. "It's much the same argument about could we have used helicopters in Afghanistan three years ago? Well, absolutely."