NASA announced the selection of three US companies that will receive government funding to further develop private space stations on Thursday. From a set of 11 proposals, NASA selected Blue Origin, Nanoracks LLC, and Northrop Grumman to receive over $400 million in federal funds through three separate Space Act Agreements.

NASA began seeking proposals in July for its Commercial Low Earth Orbit Development (CLD) program, which aims to support the development of commercial space stations. It is a part of a bigger plan to eventually replace the International Space Station (ISS) with commercial space stations. Through this model, NASA would be a customer of the commercial space industry, allowing it to save on costs and focus on basic research and exploration.

Blue Origin is set to receive $130 million to develop Orbital Reef, a free-flying space station concept the company first announced in October. Orbital Reef is being developed in partnership with Sierra Space, maker of the winged spaceplane Dream Chaser. Blue Origin says the station will be operational by the second half of the decade.

Nanoracks LLC is receiving $160 million for its Starlab station concept. Also announced in October, Starlab is a collaboration with Voyager Space and Lockheed Martin. Designed to hold up to four astronauts and conduct advanced research on biology, materials science and more, Starlab is targeted for launch in 2027 on a single flight, according to the NASA press release.

Northrop Grumman’s $125.6 million award will give it the opportunity to develop a commercial space station using existing technologies like its Cygnus spacecraft, which currently ferries cargo to the ISS. Northrop is working with Dynetics on its concept for a modular space station, with other partners to be announced in the future.

Axiom Space, a Houston company that was the first awarded funds in January 2020 to develop its commercial module to be added to the ISS, said in a statement on Twitter that it did not bid to receive one of the CLD awards.

According to NASA, the awards are the first part of a two-phase approach to ensure a smooth transition to commercial stations in LEO.

The first phase, expected to continue through 2025, will allow the grant recipients to create a plan and designs that meet both private sector and government needs. During the second phase, NASA wants to certify these stations for human astronauts to use and, ultimately, start using them.