July 11 (Reuters) - Deliveries of F-35 jets to the U.S.

military are set to resume shortly without the complete TR-3

software upgrade, the head of the F-35 Joint Program Office

(JPO) said on Thursday.

The delays in delivery to the Pentagon were linked to the

lingering issue on the TR-3 tech refresh, which refers to a

series of software and hardware improvements to the F-35 giving

the jets better displays, computer memory and processing power.

The decision to move forward without complete implementation

of the TR-3 software was made in coordination with the various

stakeholders, according to the JPO.

"We made the decision to move forward with the truncation

plan for TR-3 software," said Lt. Gen. Mike Schmidt, program

executive officer at the F-35 Joint Program Office.

Lockheed Martin ( LMT ), the aircraft's manufacturer, was

left with F-35 jets in its inventory as a result of the delays.

The advanced fighter jet contributes 27% of the company's sales.

Despite the resumption of deliveries, the Pentagon will

continue to withhold some - if not all - of the final payment

for each jet, a person familiar with the agreement said.

About $7 million of the final payment for each jet has been

withheld to date, but the source did not say how much may be

withheld when deliveries resumed.

Lockheed said the delivery of the first jets with the TR-3

update was an important milestone, but did not respond to a

request for comment on the payment details.

During an earnings call in April, Lockheed CEO Jim Taiclet

had said that delivery of the first TR-3 combat training-capable

aircraft was expected in the third quarter, with a full

transition to combat-capable aircraft expected by 2025.