Managers at NASA replanning the troubled James Webb Space Telescope have concluded it will cost $8.7 billion to finish the observatory in time for a launch in 2018 and operate it at the Earth-Sun L2 Lagrange point for five years.

The agency says that by the end of fiscal 2011 it will have spent $3.5 billion so far on the telescope, which means another $5.2 billion must be found by the end of the five-year mission following launch in 2018.

An agency spokesman said Monday the revised figure—an increase of $3.6 billion over NASA’s most recent life-cycle-cost estimate for the big infrared space observatory—includes all development, launch operations and science costs. Details of how the agency will pay the cost will be covered in the fiscal 2013 NASA budget request now in preparation, the spokesman says.

Work on the telescope has continued since a panel headed by John Casani, a special assistant to the director of the Jet Propulsion Laboratory with long experience developing scientific spacecraft, found the $5.1 billion estimate to completion was at least $1.4 billion short. Sen. Barbara Mikulski (D-Md.) ordered the Casani study. Mikulski represents Goddard Space Flight Center, where the Webb is managed, and also chairs the Senate appropriations panel that funds NASA. NASA has made key personnel changes at Goddard after Casani’s group concluded the problem was managerial rather than technical.

The telescope will have a 6.5-meter mirror—comprising 18 individually pointed segments—positioned at L2 to peer back deeper into the universe than ever before, using the infrared wavelengths to detect the red-shifted earliest objects that emerged from the so-called “cosmic dark ages” after the Big Bang.