The United States approved a possible foreign military sale to South Korea for a project to upgrade the country's aging fleet of KF-16 fighter jets for an estimated cost of $2.5 billion (2.86 trillion won), a U.S. defense agency said Wednesday.

The cost estimate is about 1 trillion won higher than the 1.75 trillion won contract that South Korea had originally awarded to the U.S. unit of the British defense firm BAE Systems to upgrade 134 KF-16 fighters with better electronic warfare capabilities.

That deal was scrapped after the U.S. and BAE Systems asked for a combined 800 billion won in additional costs.

South Korea has since decided to have Lockheed Martin, the F-16's manufacturer, carry out the project and asked for U.S. approval of a possible deal.

On Wednesday, the Defense Security Cooperation Agency said that the State Department decided to approve South Korea's request for sale of a number of parts, equipment and logistical support necessary for the project to upgrade 134 KF-16 variants C and D Block 52 "for an estimated cost of $2.5 billion."

The new cost estimate raises questions about why South Korea scrapped the original deal with BAE if a new deal would cost more.

Should the estimated cost be finalized in future negotiations, it is sure to prompt strong criticism of the South Korean government for wasting taxpayers' money.

The agency said it notified Congress on Tuesday of the possible sale.

The principal contractors will be Lockheed Martin and Northrop Grumman, it said.

"The ROK Air Force is modernizing its KF-16 fleet to better support its air defense needs. This upgrade allows the ROK to protect and maintain critical airspace and provide a powerful defensive and offensive capability to preserve the security of the Korean peninsula and its vital national assets," the agency said. (Yonhap)