The European Space Agency and aerospace firm Airbus say they've agreed on a contract that will secure their participation in the construction of NASA's new manned spaceship capsule Orion.

The ESA, using Airbus as a contractor, will create the "back end" of the Orion project, leaning heavily on the design of the unmanned Automated Transfer Vehicle launch craft the European agency's been utilizing to convey cargo to the International Space Station and back.

It will serve as a combination propulsion and cargo unit, providing thrust for missions while carrying supplies to keep astronauts alive on long space journeys.

The European "service module" needs to be completed in time for the scheduled first test flight of the Orion capsule, set for 2017.

The contract valued at almost $500 million, was signed by ESA and Airbus officials and witnessed by representatives from NASA, the U.S. aerospace industry, and the German federal government and the DLR, Germany's space agency.

The reliability and performance of the ATV, demonstrated time and again in space station resupply missions, have made it the leading candidate as a basis for Orion's service module, said Bart Reijnen, the head of orbital systems and space exploration at Airbus Defense and Space.

"Let me be very clear -- if Europe had not done ATV, the U.S. would not have invited Europe to do the service module for them," he said.

"If we had not done ATV, we would have started with a much lower technology readiness level, which would have meant spending more money and taking a longer schedule."

Manufacture of the service module will take place principally in Germany with components supplied by a number of European countries.

Costs of building the module will be borne entirely by Europe, as payment for costs it will incur in participating in activities on the International Space Station from 2018 through to 2020.

Such "barter" arrangements growing out of countries' use of the space station have been standard practice.

The 2017 test of the Orion capsule with the European service module will be unmanned, NASA says, but a following mission will see astronauts taken into space, most likely for an orbital mission around the moon.

NASA officials emphasized the importance of a reliable service module for Orion.

"The service module is a key element of the Orion vehicle," said Kirk Shireman, deputy director of NASA's Johnson Space Center in Houston. "In fact, we talk about the crew module and the service module making up the Orion vehicle."