The order is worth USD 10.6 billion (9.3 billion euros) at list prices, but airlines are usually able to negotiate considerable discounts when ordering many planes.
The preliminary order marks the latest deal the Columbian airline has negotiated with the Toulouse-based plane manufacturer since teaming up with Airbus as part of Avianca's fleet renewal strategy.
"After a thorough technical evaluation, we selected the A320neo family for its excellent fuel efficiency, reliability and comfort," said Avianca's chief executive Fabio Villegas Ramirez.
"These qualities are essential to further our growth and fleet modernisation strategy and improve our passenger experience," he said in a statement.
In 2012, Avianca ordered 51 A320 family aircraft, including 33 A320neo planes. To date the airline has ordered nearly 200 Airbus aircraft, with nearly 130 of those currently in operation.
The A320 is a medium-haul, single-aisle plane that usually seat 150 passengers in a two-class cabin configurations, or 180 people in a more compact layouts for low-cost and charter flights.
The A320neo features new engines and wing modifications that should provide 20 percent fuel savings. It helped Airbus book 1,456 orders last year, which beat rival Boeing's 1,432.
Airbus executives cheered the Avianca deal as a good start for 2015 business.
"Airbus is privileged to work with Avianca on this important agreement," said John Leahy, Airbus Chief Operating Officer, Customers. "We are proud that Avianca will rely on the A320neo, its unbeatable productivity and fuel efficiency to renew its fleet."