President Bush announced an ambitious plan Wednesday to send astronauts back to the moon, to create a permanent lunar colony and finally to make the first manned mission to Mars.

"It is time for America to take the next step," Bush said at NASA (search) headquarters in Washington, D.C. "We will begin the effort quickly. We'll make steady progress — one mission, one voyage, one landing at a time."

The space program has "always reflected the finest values of our country," said Bush. "The desire to explore and understand is part of our character and that quest has brought tangible benefits that improve our lives in countless ways."

Bush said he envisioned "a new foothold on the moon ... and new journeys to the world beyond our own," underscoring renewed commitment to manned spaceflight less than a year after the loss of the space shuttle Columbia (search) and a crew of seven.

Under the plan, the United States would withdraw from the International Space Station (search) by 2010 and the aging space shuttle fleet would be retired at about the same time. The shuttle now costs NASA about $4 billion a year and the station about $1 billion.

In the shuttle's place, Bush called for development of a new Crew Exploratory Vehicle (search), capable of carrying astronauts to the space station and the moon.

The plan also calls for astronauts to go to Mars (search) by 2030. The president asked for an increase of less than 5 percent a year to NASA's budget, about $800 million per year over the next three years. A manned landing on the moon is estimated to cost about $50 billion.

The 2004 budget awaiting approval from the Senate calls for $15.5 billion for NASA, a $90 million increase over the previous year.

White House Press Secretary Scott McClellan says much of the funding for this initiative will come from shifting around about $11 billion within NASA's current five-year, $86 billion budget.

"There will be requests for additional funding," McClellan said. The president submits his annual budget request to Congress in early February.

McClellan would not say what the administration estimates the total cost of such programs would be, instead suggesting that other countries, perhaps including Russia, would share in the project and help bear the costs.

"Russia would have some important contributions," McClellan said.

NASA administrator Sean O'Keefe (search) said the additional request is not a great demand on future budgets.

"What we're looking at is an investment that the president is going to propose that is less than 1 percent of the federal budget. Indeed, the average taxpayer will contribute what amounts to a monthly cable bill amount towards this, and that's about the extent of what is involved, it's not just a budget buster," O'Keefe told Fox News.

O'Keefe said that Bush's plan to set up a landing base on the moon will set NASA's agenda for the next 10 to 15 years.

NASA recently sent an unmanned craft to Mars, which has been sending back photographs of the surface of the planet.  NASA scientists say that the images reflect the hypothesis that Mars once had water and the pictures show a surface of dried-out lake beds.

O'Keefe told Fox News that the space station provided some of the data needed to determine whether a lunar base is possible, and a lunar base will help determine the possibility of a manned mission to Mars.

"The effects of radiation, the effects of degeneration of muscle mass and bone mass and all those are factors that we can mitigate, and that's what we are doing on the International Space Station right now and will continue to do for the next decade, at least as to determine what those human endurance, human effects kinds of challenges are in order to make space exploration a reality," he said.

The effort to return to the moon will require building new spacecraft and sending out robotic craft to provide materials to be used later by human explorers, say experts.

O'Keefe said a colony on the moon could be used to exploit mineral resources of the lunar surface, such as helium-3 (search), an isotope that theoretically could be used for rocket fuel. There are suggestions that the moon has deposits of water near its poles. Water could be chemically split to obtain hydrogen and oxygen, a combination that could be used as a rocket propellant. The oxygen could be used for an atmosphere inside sealed shelters.

Almost one year ago, the president appeared at the Johnson Space Center in Houston, Texas, to eulogize the seven astronauts who perished aboard Columbia.

At the time, Bush emphasized that the rationale for manned space flight transcends questions about money.

"This cause of exploration and discovery is not an option we choose; it is a desire written in the human heart. We are that part of creation, which seeks to understand all creation. We find the best among us, send them forth into unmapped darkness, and pray they will return. They go in peace for all mankind, and all mankind is in their debt," he told mourners.

Fox News' James Rosen and Courtney Wells and The Associated Press contributed to this report.