South Korea and France's Thales Group will jointly develop a new augmentation system for global positioning systems that will greatly reduce the scope and rate of errors in existing GPS, the transportation ministry said Tuesday.

The country's state-run Korea Aerospace Research Institute will sign a $40 million deal with the French firm on Wednesday to jointly develop a new and advanced Satellite Based Augmentation System for GPS by 2021, according to the Ministry of Land, Infrastructure and Transport.

The new SBAS will especially help reduce errors in aviation GPS, which currently occur at a rate of one in five million and by up to 16 meters horizontally and 20 meters vertically.

"By reducing the error and providing more accurate location of aircraft by using satellites, the SBAS is expected to help set the shortest air route possible while also helping reduce the cost of fuel for flights and thus expanding their capacities," the ministry said in a press release.

A separate agreement will be signed with the European Aviation Safety Agency to jointly verify the new GPS augmentation system following its development, it added. (Yonhap)