RAF FAIRFORD, England (Reuters) - United Technologies Corp's engine-making unit has won $1.5 billion in more funding for 99 engines to power the F-35 fighter jet, bringing the total value of its 10th production contract to $1.95 billion, the Pentagon said on Thursday.

The U.S. Defense Department's F-35 program office said the prices of the F135 engines to be built by Pratt & Whitney were between 2.6 percent and 4.2 percent lower than in the previous production contract. It gave no specific prices.

"The propulsion system team has kept their word in delivering on their price reduction commitments for the F135 propulsion system, which is critical to making the F-35 more affordable for the U.S. military and our allies," said Air Force Lieutenant General Chris Bogdan, who runs the F-35 program for the Pentagon.

The F-35 program office said the contract cut the price of 86 conventional takeoff and landing (CTOL) and carrier variant (CV) engines by 2.6 percent. The price of the 13 short takeoff and vertical landing engines, which include lift fans built by Rolls-Royce Holdings PLC, fell by 4.2 percent, it said.

Mark Buongiorno, who heads Pratt's F135 engine program, said the company was committed to continuing to drive down costs.

Since 2009, Pratt has cut the cost of the CTOL and CV F135 engines by half, and the STOVL propulsion system by nearly 35 percent, according to the statement.

Recent investments by the company and the government are expected to generate $7.5 billion in savings over the life of the F-35 program, it said.

Pratt has delivered 288 F135 production engines thus far, with delivery of the first engines under the new contract to begin in 2017.

(Reporting by Andrea Shalal; Editing by Leslie Adler and James Dalgleish)