European governments have agreed to fund the development of Ariane 6, a next-generation rocket that will be used to launch satellites into orbit.

The decision taken Tuesday at a ministerial meeting in Luxembourg comes as the European Space Agency faces increasing competition from cheaper rivals.

ESA's member states also approved funding to upgrade the smaller Vega launch vehicle, continue participating in the International Space Station, and proceed with the second part of its ExoMars mission.

The agency is launching the first part of ExoMars in 2016 to investigate gases in Mars' atmosphere and drop several instruments onto the Martian surface.

The latest funding allows ESA to launch the second ExoMars mission in 2018, intended to deliver a rover capable of searching for signs of past or present life.