Blue Origin owner Jeff Bezos, who founded Amazon.Com and also owns the Washington Post, announced the deal to jointly fund a new BE-4 rocket engine with United Launch Alliance in the US capital yesterday.
ULA is a joint venture of Boeing and Lockheed Martin.
"ULA has put a satellite into orbit almost every month for the past eight years - they're the most reliable launch provider in history and their record of success is astonishing," Bezos said.
The deal allows for a four-year development process, with full-scale testing in 2016 and first flight in 2019, Blue Origin said in a statement.
The BE-4 would not replace the Russian-made RD-180 rocket engine that ULA uses to power its Atlas V rocket.
Rather, two BE-4s would be used to power both Blue Origin's and ULA's "next generation launch systems," it said.
The companies declined to say how much they were spending to develop and build the new rocket engine, which has already been three years in the making.
In April, SpaceX also filed a legal challenge to the US Air Force's award of a major contract to ULA, saying it unfairly excluded other companies from competing for a share of national security satellite launches.
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