Space Taxi To Be Built, Nasa Awards Contract

Since retiring its fleet of shuttles three years ago, the space agency's crew have been hitching rides on Russian transport - at a cost of $70m per seat - to reach the habitable satellite.

Nasa officials made the announcement at Kennedy Space Center, Florida, where the launches should lift off by 2017.

The agency will pay the companies $6.8bn (£4.2bn) - $4.2bn to Boeing and $2.6bn to SpaceX.

Nasa Administrator Charles Bolden said: "Today we are one step closer to launching our astronauts from US soil on American spacecraft."

SpaceX is backed by Tesla owner Elon Musk

He said the deal would allow the space agency "to focus on an even more ambitious mission, that of sending humans to Mars".

Aerospace veteran Boeing has a history with the US space programme going back half a century.

SpaceX is already delivering cargo to the space station. It is backed by Tesla owner Elon Musk, who dreams of colonising Mars.

The Californian-based firm recently unveiled its seven-seater Dragon V2 space capsule, a re-useable spacecraft which it says will be able to take-off and land anywhere on Earth.

The losing contender for the contract was Sierra Nevada Corp, which supplies rockets for sub-orbital tourist trips on Sir Richard Branson's Virgin Galactic.

Amazon.com founder Jeff Bezos' space-exploration start-up Blue Origin took Nasa funding in the early rounds of tendering.

But it then said it would continue working on its own, without government help.

Funding gaps and a shift in focus to deep space missions led Nasa to end its space shuttle programme in 2011.