WASHINGTON (Reuters) -After months of delay, the Pentagon will select as soon as this week the defense company to design and build the Navy's next stealth fighter, a U.S. official and two people familiar with the decision said, it will be a multibillion-dollar effort for a jet seen as central to U.S. efforts to counter China.

Boeing Co ( BA ) and Northrop Grumman Corp ( NOC ) are competing to be chosen to produce the aircraft, dubbed the F/A-XX. The new carrier-based jet will replace the Navy's F/A-18E/F Super Hornet fleet, which has been in service since the 1990s.

The decision to move ahead with a selection was made by Defense Secretary Pete Hegseth on Friday, the U.S. official and one of the people said. 

The U.S. Navy could announce the winner of the competition to build its fighter as soon as this week, one of the people said. But last-minute snags have delayed progress on the Navy jet in the past and could do so again, sources said.

The Navy and the Pentagon did not respond to several requests for comment.

Holdups on F/A-XX highlight broader questions about the future of naval aviation and the role of aircraft carriers in confronting China. Delaying the program or starving it of funds could leave the Navy without a modern fighter capable of operating from carriers in the 2030s and beyond, potentially undermining the fleet's ability to project power. 

The F/A-XX is expected to feature advanced stealth capabilities, improved range and endurance, and the ability to integrate with both uncrewed combat aircraft and the Navy's carrier-based air defense systems.

China has been "incredibly ambitious in prototyping 6th generation aircraft and fielding 5th generation fighters and bombers, so this award could be viewed as an important decision to keep pace," said Roman Schweizer an analyst at TD Cowen tols Reuters in an email.

DELAY

A funding dispute in the spring and summer between the Pentagon and Congress delayed the program's advancement.

The Pentagon sought $74 million for the jet to keep it on "minimal development funding." Some Pentagon officials had sought to delay the program by up to three years, citing concerns about engineering and supply chain capacity, Reuters reported in May.

Congress and the Navy had wished to move forward with awarding a contract. Congress put $750 million to speed the F/A-XX jet into the massive tax-cut and spending bill which was signed into law this summer. Additionally, Congress earmarked an additional $1.4 billion for F/A-XX in fiscal 2026.

Beyond the funding dispute, there was also debate during the months-long delay about whether defense contractors Northrop and Boeing ( BA ) would struggle to make the jet on schedule.

Defense officials debated whether Boeing ( BA ) could employ enough engineers for the project after it was awarded a contract to build the U.S. Air Force's F-47 jet in March, sources said. They also debated whether Northrop would strain under the ballooning costs of the Sentinel intercontinental ballistic missile program, aimed at replacing the aging Minuteman III missiles, the sources said.

The quantity of F/A-XX jets, the value and exact timelines of the program remain classified, but previous such contracts - such as that for the F-35 - have been worth tens of billions of dollars over their lifetime.

The U.S. Navy still plans to buy more than 270 Lockheed Martin Corp F-35C jets for its carrier fleet. Earlier this year, Lockheed Martin ( LMT ) was ejected from the F/A-XX competition. 

The first production jets are expected to enter service in the 2030s, while F/A-18s are expected to remain in service into the 2040s.