A $1.1 billion contract for the development and launch of the first model of Europe’s Automated Transfer Vehicle (ATV) unmanned cargo craft is expected to be signed by June, following months of negotiations to put a limit on cost overruns, according to European government and industry officials.

The contract to be signed between EADS Space Transportation of Bremen, Germany, and the European Space Agency (ESA) is expected to be valued at 925 million euros ($1.1 billion), with a first launch to the international space station planned for mid-2005.

A precise launch date will await final negotiations between the United States and its space station partners on the return of NASA’s space shuttle to servicing missions to the orbital outpost.

Weighing about 20,000 kilograms when fully loaded and launched atop Europe’s Ariane 5 heavy-lift rocket, the ATV will deliver more than 9,000 kilograms of fuel, water and other supplies to the International Space Station. It will also be used to reboost the station into its operating orbit.

Once unloaded at the station, the ATV will be filled with garbage, undocked and then destroyed in a controlled atmospheric re-entry.

The first ATV was supposed to be launched in September 2004. Following technical glitches that delayed the vehicle’s development, ESA is insisting on a renewed ATV contract with firm, fixed-price terms. Jorg E. Feustel-Buechel, ESA’s space station director, said the new contract will ensure that any further hiccups in ATV development will be financed by the vehicle’s industrial contractors. The previous ATV development contract permitted the contracting team to recover unplanned costs by billing ESA.

ESA plans to launch six additional ATVs to the station. Feustel-Buechl said it is unclear when the follow-on contract for those vehicles will be signed, but noted that NASA’s new long-term space exploration program could make the ATV more important than it was before.

If NASA retires the space shuttle around 2010 as currently planned, the ATV may be in greater demand for space station logistics and reboost.

EADS Space Transportation officials said ATV development is now back on track after technical hurdles relating to software and propulsion system difficulties. The first cargo carrier was mated to its propulsion module and a fully equipped avionics suite in late March at EADS Space Transportation’s Bremen plant.

Later this spring, the flight vehicle, named Jules Verne, will be shipped to ESA’s Estec technology center in Noordwijk, Netherlands, for a final series of tests, which  should be the last hurdle before launch.

Josef Kind, president of EADS Space Transportation, said in a statement that the ATV’s propulsion and avionics systems presented special challenges for European industry. He also said the ATV could find other uses for in-orbit servicing and cargo delivery unrelated to the space station.

ESA announced April 2 that Sodern of Paris has delivered the first ATV’s flight videometers, the optical guidance sensors that use laser beams to home in on the international space station for docking. The system is activated once the ATV is 250 meters from the station. It sends light pulses up to 10 times per second that are bounced off reflectors aboard the station to assure proper alignment to the docking port.

Two sets of reflectors are scheduled to be installed on the station’s Russian-built Service Module this summer during a planned space walk by station astronauts. Prototypes of the reflectors, in place aboard the station since 1998, will be returned to Earth for analysis. Russian companies supplied the docking system for the ATV to assure its compatibility with the Service Module.

The ATV also will carry a backup system called a telegoniometer to be used for rendezvous and docking in the event the videometers do not function.