Defence ministers of the three countries said they had reached a "balanced" deal on carrying out the research necessary to select the technology that will underpin the Future Combat Air System (FCAS).

French Defence Minister Florence Parly's office said the "Phase 1B" contracts would be worth 3.5 billion euros ($4.3 billion) between now and 2024 and would be funded and shared equally between France, Germany and Spain.

Phase 2 will involve building a demonstrator, an early prototype aimed at testing the reliability of the jet's cutting-edge technology.

The agreement announced Monday was crucial for moving ahead on Europe's biggest defence programme, which aims to prove the continent's ability to integrate its disparate defence forces and increase its military sovereignty.

Time had been running out for the German government to secure parliamentary approval for the research phase before a general election looming in the autumn.

Parly and her German and Spanish counterparts, Annegret Kramp-Karrenbauer and Margarita Robles, said the three countries were ready to give the deal "formal validation".

France and Germany announced plans to build a common fighter in 2017, with Spain joining later.

France's Dassault Aviation and European planemaker Airbus, which are teaming up to build the jet, had expected to complete a demonstrator by 2026 but are now only expected to do so by 2027.

The plane is slated to replace the French-made Rafale jets and German and Spanish Eurofighter planes by 2040.

Beyond a next-generation fighter jet, the FCAS programme includes drones and an ultrafast communications network dubbed the "combat cloud" that will use artificial intelligence capabilities.

The total cost of the programme is expected to reach nearly 100 billion euros, up from previous estimates of 50 to 80 billion euros.

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DASSAULT AVIATION

AIRBUS GROUP