US President Donald Trump wants to privatise air traffic control operations, creating a not-for-profit company to oversee functions now handled by the federal government.
The White House on Monday said the plan would modernise the US system, reducing costs and delays.
The idea has circulated in Washington for years without moving forward.
But officials say that with Republicans in control of Congress and the White House, it is time to try again.
"We're proposing to take American air travel into the future, finally," Mr Trump said.
Monday's announcement was the first to come during a week in which the administration hopes to focus on policy changes they say will improve US roads, bridges and airports.
The subject is safer territory for the White House, which has run into trouble on a number of initiatives such as tax reform and is facing political pressure over Mr Trump's comments about terrorism, financial conflicts of interest and relationship with Russia.
The plan to privatise air traffic control was included in Mr Trump's budget proposal.
Officials on Monday said they want the Federal Aviation Administration to continue its role in safety enforcement. But oversight of air traffic management and the nearly 30,000 workers in that area would go to a private not-for-profit organisation.
Supporters of the plan, which include many of the major US airlines, say the current system slows the introduction of new technology and makes funding subject to the unpredictable whims of Congress.
They point to the slow-going move from a radar-based system to one that uses GPS technologies as evidence of a need for change.
Airline stocks were mixed after the announcement. Delta Air Lines, which had opposed the idea, traded down on Monday but shares of American Airlines opened higher.
How are people reacting?
The plan will need to get through Congress for approval. Mr Trump's budget proposal said the change would take effect in 2021 and estimated the reform would increase the budget deficit by about $45bn (£35bn) over 10 years.
Representative Nancy Pelosi, who leads Democrats in the House, called the idea a "tired Republican plan that both sides of the aisle have rejected".
"Selling off our Air Traffic Control system threatens passenger safety, undermines the FAA's ongoing modernisation, jeopardises access to rural airports and adds to the deficit," she said in a statement.
The National Air Traffic Controllers Association, a union that represents about 20,000 air traffic controllers, engineers and other workers, took a more measured tone.
The organisation, which supported a similar proposal last year, said it believes more reliable funding streams are critical, but wants to see "specifics".
"We look forward to reviewing the specifics of the air traffic control (ATC) reform legislation so we can evaluate whether it satisfies our Union's principles, including protecting the rights and benefits of the ATC workforce," president Paul Rinaldi said in a statement.