I'm confused by your question. If you're swapping to a totally different degree it still is an internal transfer 100%. I would apply as soon as possible since the mid-year dates close much sooner than you'd think.
If you want to change your major within your current degree (which i guess you cant since its called aerospace engineering), contact the faculty for options.
I don't have a major in my degree. I can only take mech electives in my last year. That's it. I think I will apply for an internal transfer. I'll talk to the faculty tomorrow.
Applications/transfers for both Aero and Mech Eng are handled by the Department of Aerospace and Mechanical Engineering (Duh...) However, they are registered as different degree's and you will have to applying for an internal transfer. There should be no problem and minimal questions asked on the switch considering that they're nearly identical. I believe that you'll have to submit the application to the Faculty of Engineering main office though (Old Building 72, no idea what it's called now) and they'll forward the papers to the department.
To be honest, it doesn't matter when you make the transfer official as you could drop all your aero units and complete the mech ones first since there's so many overlaps between them.
P.S. Note that the dept of aero/mech eng just lost 2 key person who knows the whole system inside out (Helen and Nicole). They've been replaced by two others who are not really familiar with how everything operates "read: a second year would know more about the course than them but with less authority" Do be patient with them when they use the excuse: "Oh I just started working in this position 3 months ago and don't know how shit yet - pretty accurate description when I asked them about FYPs".