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These guys all have it right on the money. I happen to own a 89 244GL with a 94 940T engine under the hood.
It was done right, in a Volvo shop, and it was a pretty straightforward transplant, but definitely not a simple plug-n-play job. The builder went to great lengths to interface the 940 engine management with the 240 chassis wiring.
Mechanically, it'll fit together. Swap the 240 engine mount brackets onto the 940T block. Decide if you want 240 arrangement or 940 arrangement for accessories: PS pump on a 940 is where 240 has it's alternator.
You need to have the late 940 engine to get one with the distributor up front, as the 740 dist will not fit in the 240 engine bay without mods. There MAY be a dist drive gear in the engine or there may not be, if you find one with a rear dist. If not you need a different intermediate shaft (the one that drives the oil pump, and on a 240 drives the distributor.)
I drive mine every day and it's fun, but just be advised that it's a sizable project and you need help and good advice from people who've done it before.
--Rob
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89 244GL Turbo // 92 244 M47 \\ 90 745T // 76 242 Convertible
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