Pentagon and Lockheed reach agreement on F-35 fighter jets

WASHINGTON, Oct 27 (Reuters) - The U.S. Defense Department and Lockheed Martin Corp have agreed in principle for the production of 43 F-35 Lightning II fighter jets, the Pentagon said on Monday.

The Pentagon statement said cost details would be released once the agreement is finalized in coming weeks. Sources familiar with the deal told Reuters last week it was worth about $4 billion..

The average price for the radar-evading warplane will be about 3.6 percent lower than under the previous contract, the statement added.

The Pentagon said the contract, for what will be the eighth batch of F-35 fighters, involves 29 U.S. aircraft including 19 F-35As, six F-35Bs and four F-35Cs and also "provides for the production of the first two F-35As for Israel, the first four F-35As for Japan along with two F-35As for Norway and two F-35As for Italy."

Britain will receive four F-35Bs, the statement added. Deliveries will begin in 2016.

Both sides had expected to reach a deal in May or June, but negotiations slowed after a June 23 engine failure on an Air Force jet grounded the entire F-35 fleet for several weeks. (Reporting by Peter Cooney; Additional reporting by Andrea Shalal; Editing by Steve Orlofsky)