France and Germany have awarded a 65 million euro ($74 million) contract to two companies as a first step under a joint program to develop a next-generation combat jet, local media reported Wednesday.

French aircraft manufacturer Dassault Aviation and European aerospace corporation Airbus will build the jet, which is expected to replace Dassault’s Rafale jets and Germany’s Eurofighters by 2040.

The two-year contract is being financed equally by both countries.

French Armed Forces Minister Florence Parly and German Defense Minister Ursula von der Leyen were present at the signing ceremony in northeastern Paris.

The French daily Le Monde reported that the first test flights will be made by 2025. (Anadolu)