The new agreement marks the first time that the unit price of these jets is below US$100 million.
The previous order, which included 55 jets for the US and 35 for partners and Foreign Military Sale customers, was US$102 million per jet. The price now stands at around US$95 million per jet, a total reduction of US$7 million per jet.
The new agreement comes after US President Trump tweeted about the project saying the spending was "out of control".
Lockheed said, "President Trump's personal involvement in the F-35 program accelerated the negotiations and sharpened our focus on driving down the price."
Shares of Lockheed Martin fell after Trump made his original "out of control" tweet and fell again when he complained about the global manufacturer at a press conference in January.
However, shares have since recovered.
Spokespeople for the US Department of Defense have said the new deal is beneficial for both the US and allies, including Australia.
Pentagon F-35 project head Lieutenant General Chris Bogdan said the agreement was a "good and fair deal for the taxpayers, the US government, allies and industry".