WASHINGTON, March 4 (Reuters) - The U.S. Navy will

eliminate defense giant Lockheed Martin Corp ( LMT ) from the

competition to build its next-generation carrier-based stealth

fighter - a key part of broader plans to confront China on its

home turf, people familiar with the decision said.

The Navy will move ahead with designs from Boeing Co ( BA )

and Northrop Grumman Corp ( NOC ) while eliminating Lockheed

Martin ( LMT ) from the next-generation fighter jet competition,

dubbed the F/A-XX. The new jet will replace the Navy's F/A-18E/F

Super Hornet fleet, which has been in service since the 1990s.

Lockheed Martin ( LMT ) did not immediately respond to a request for

comment.