Nasa has given three companies more than $1bn to develop its next generation of space craft.
The American space agency funded proposals from Boeing and SpaceX to build commercial crew transportation systems to replace the retired Space Shuttle, and provide the opportunity for commercial travellers to go to space.
Boeing was given $460m and SpaceX $440m, while the Seirra Nevada Corporation received $212.5m.
Sierra Nevada's money will be spent developing its Dream Chaser, which looks like a smaller Space Shuttle.
The three companies will together build and test a full commercial space travel system, including the launch vehicles, the space crafts themselves and the mission control.
The idea is to reduce the cost of space travel and boost private industry, while maintaining infrastructure in the US.
In June Space X became the first privately developed space vehicle to dock with the International Space Station.
Nasa said:
Between now and May 31, 2014, NASA's partners will perform tests and mature integrated designs. This would then set the stage for a future activity that will launch crewed orbital demonstration missions to low Earth orbit by the middle of the decade.
"Today, we are announcing another critical step toward launching our astronauts from U.S. soil on space systems built by American companies," Nasa Administrator Charles Bolden added.
"We have selected three companies that will help keep us on track to end the outsourcing of human spaceflight and create high-paying jobs in Florida and elsewhere across the country."
Until Nasa launches its own system in five years Russia remains the only country capable of sending Japanese, US and European crew to the International Space Station.