Electric propulsion has the potential to revolutionize aircraft design and architecture. A distributed electric propulsion system for a VTOL aircraft can exploit aerodynamic benefits increasing the lift to drag ratio by 4 to 5 times (Fredericks et al, Intl Powered Lift Conf, Aug 2013) to that of conventional rotorcrafts. Basic physics principles can demonstrate that weight and efficiency optimized electric motors and propellers of the same power rating will rotate at different rpm making a transmission system/gearbox desirable. High speed electric motors have excellent specific power whereas low speed propellers are more efficient. In distributed propulsion systems there may be numerous individual propulsors making gearbox maintenance a significant effort that will detract from the potential cost savings of electric propulsion. We propose a magnetic transmission (magnetic gearbox) design that will allow optimal matching of high specific power electric motors to efficient propellers for use on electric or hybrid-electric air vehicles. The proposed magnetic transmission will have a mass of no more than an equivalent rated mechanical gearbox. Unlike conventional gears the magnetic transmission will have no lubrication requirements, gear tooth wear, will be immune to vibration fatigue in the gear teeth, and will have minimal acoustic noise. If overloaded the design will benignly "slip a tooth" and then re-engage. We propose to design, build and test a magnetic transmission optimized for specific torque, and compare the weight of the system to an optimal mechanical gearbox of the same power. We will also perform design studies to show how a magnetic gearbox could scale up to a helicopter main rotor gearbox.