The announcement comes as the global aviation industry is looking to bounce back from a collapse in demand caused by the coronavirus pandemic grounding planes.
"Despite the crisis in global aviation, it is vital for our future that we continue to address climate change and we remain focused on playing our part to reduce the impact we have on the planet," BA chief executive Sean Doyle said in a statement.
"Progressing the development and commercial deployment of sustainable aviation fuel is crucial to decarbonising the aviation industry and this partnership with LanzaJet shows the progress British Airways is making as we continue on our journey to net zero," he added.
BA, owned by aviation giant IAG, will invest an undisclosed amount in LanzaJet, which starts building its first commercial plant in the US state of Georgia later this year.
The airline will purchase fuel from LanzaJet to "power a number of the airline's flights from late 2022", BA said in the statement.
The investment is part of BA's ambition to become a net zero carbon company by 2050.
LanzaJet, spun off from US biotech firm LanzaTech last year, combines gasoline with sustainably-sourced ethanol -- mainly from agricultural processes -- to create cleaner aircraft fuel.
Current jet fuel, or kerosene, is distilled from crude oil.
BA joins LanzaTech, Japan's Mitsui and Canada's Suncor Energy as investors in LanzaJet, which is looking into the possibility of having a bio-refinery built in the UK.
BA already has a partnership with sustainable fuels technology company Velocys, aiming to convert commercial and household waste into cleaner jet fuel by 2025.
IAG plans to invest $400 million (332 million euros) in sustainable aviation fuel over the next two decades.
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