South Korea will sign a deal with Indonesia this month to cement the Southeast Asian country's partnership in the local Air Force project to build indigenous combat jets with stealth capacities, the procurement agency said Tuesday.

"Currently our preferred bidder company and Indonesia's authorities are vigorously leading their negotiations and they plan to sign a tentative contract within October," the Defense Acquisition Program Administration said in a statement.

The agreement will tentatively seal Indonesia's participation in the Korean Fighter Experimental (KF-X) project to replace South Korea's aging fleets of F-4s and F-5s with locally produced combat jets with stealth capabilities from 2025.

Previously, the two countries forged deals under which Indonesia will shoulder 20 percent of the development costs for the South Korean project and acquire about 50 of the new planes.

The forthcoming October deal will be signed between Indonesia's government and firms and Korean Aerospace Industries, the South Korean preferred bidder for the project.

DAPA officials said that it will officially designate KAI as the contractor for the KF-X within this year and kick off the development task in earnest.

"The DAPA and Indonesia's defense ministry are closely cooperating for the timely launch of the KF-X development and its successful result," according to the agency.

The Air Force project has recently taken a blow after the U.S. government denied an export permission for Lockheed Martin to contribute four key technologies to the South Korean project. (Yonhap)