The space agency's administrator, Michael Griffin, outlined the project, which he said fulfilled President George Bush's ambition to see a return of manned lunar missions.
Wary of critics seizing on the cost of the venture - following the Gulf coast's multi-billion dollar brush with Hurricane Katrina, Mr Griffin called on Americans to show some long-term vision. "When we have a hurricane, we don't cancel the Air Force. We don't cancel the Navy. And we're not going to cancel Nasa," he said.
The programme will see the development of the long-awaited successor to the ageing space shuttles, which promises to be "ten times safer", according to Mr Griffin.
It also served as a remarkable reminder of how little has changed since the Apollo missions which last delivered an astronaut to the Moon in 1972. The project, for example, will use solid rocket fuel and will require the return capsule to land on solid ground with the use of parachutes. But Mr Griffin said that it should be thought of as "Apollo on steroids". A four-person lunar expedition crew would make use of a Crew Exploration Vehicle (CEV) fitted with solar panels and there would also be the ability to extract fuel from the Moon, he said.
"We had many review boards and review panels study this architecture as we developed it," he said. "Those groups did include several people from the Apollo generation." The plan outlined yesterday would require the astronauts to rendezvous in earth's orbit with a separate pre-launched vehicle, and then make the outbound voyage to the Moon. Once in lunar orbit, all four crew members would travel down to the moon in a lander. They would depart the CEV, putting it in autopilot mode as they spent seven days on the lunar surface. By contrast, the Apollo missions involved six two-person teams landing at the Moon's equatorial region. Each expedition had an additional astronaut who remained in lunar orbit.
Mr Griffin said that the $104bn return-to-the-Moon mission would also see astronauts cover much more territory than Apollo moonwalkers, who were restricted to the area around the Moon's equator. One of the goals is likely to be an attempt to find ice that may be frozen within shadowed craters at the moon's poles.
"We have contacted a large group of lunar experts and asked them what the points of interest were to them," he said. "They ranged from the poles to the equator - this architecture can service them." Nasa has been working on a return to manned lunar missions ever since President Bush outlined his so-called Vision for Space Exploration that could see permanent communities on the Moon as a stepping off point for missions to Mars.
Then he said: "Mankind is drawn to the heavens for the same reason we were once drawn to unknown lands and across the open sea. We choose to explore space because doing so improves our lives and lifts our national spirit. So let us continue the journey."
At the time, Mr Bush's political motives were questioned and others questioned whether the proposals were part of a broader US plan to establish weapons in space.
Almost immediately the project has run into criticisms on Capitol Hill.
"This plan is coming out at a time when the nation is facing significant budgetary challenges," House Representative Bart Gordon from Tennessee, said. "Getting agreement to move forward on it is going to be heavy lifting in the current environment, and it's clear that strong presidential leadership will be needed."
Mr Griffin dismissed suggestions that the cost of developing the project would be better spent on helping the Hurricane Katrina recovery effort. He said the mission was "long term investment for our future" and that a lot of other hurricanes and natural disasters would likely befall the US and other countries before the 2018 launch date.
"We must deal with our short-term problems while not sacrificing our long-term investments in our future. Experts have decided to use the project as a means of dealing with task of finding a successor to the shuttle, which has been plagued with problems.
The same problems with falling debris that doomed the Columbia in 2003 recurred in July with the launch of Discovery, promp- ting the grounding of the shuttle fleet. A mission scheduled for September has now been put back to next March. More than $1bn worth of damage by Katrina to Nasa facilities in Louisiana and Mississippi could push the launch date back further still.