The first new military service in the US in more than 70 years will fall under the Air Force.
The funding allocation was confirmed when the US President Donald Trump signed the $738 billion annual US military budget.
While the troops will not be put into orbit, they are expected to protect American assets such as the communication and surveillance satellites.
Speaking at an army base near Washington, the President said, "amid grave threats to our national security, American superiority in space is absolutely vital."
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