"While many questions remain unanswered about South Africa's arms dealings over the past decade, the decision by government to cancel the order for military aircraft should be commended," he said in a statement.
During times of extreme economic distress spending billions of rand on military aircrafts could not be justified, Tutu said.
This week the government terminated South Africa's contract to buy eight multi-billion rand Airbus A400M strategic lift military aircraft because of delivery delays and sky-rocketing costs.
South Africa signed the deal to buy the eight aircraft in December 2004. At the time the cost of the planes was put at R17.6-billion and delivery was expected to be staggered between 2010 and 2012.
However in the five years since the deal was inked, the cost of the fleet of planes had nearly tripled to R47 billion.
"When many of us participated in the struggle to overthrow the apartheid system, we were struggling for a new type of government that would put the needs of ordinary South Africans above military hardware," said Tutu.
"I pray that the decision to cancel the order for the military aircraft heralds a new era of more compassionate governance."
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