The agency has recently struggled to find rockets to launch its missions into space, and is following in the footsteps of NASA by purchasing services from firms rather than developing them itself.
In November, the ESA launched a competition allocating up to 75 million euros ($80 million) to a maximum of three firms to build a vehicle to take cargo to the ISS and back.
Out of seven proposals, the ESA selected those from French-German The Exploration Company and French-Italian company Thales Alenia Space, each of which will receive 25 million euros, the agency's chief Josef Aschbacher told AFP.
"The evaluation is still ongoing," he said, adding that the ESA may yet select a third proposal.
The contracts, which run until June 2026, will focus on developing the technology and structure of the vehicles.
Additional funds for the ambitious plan would need to be approved by the ESA's 22 members states in 2025.
This would cover a mission planned by the end of 2028 to deliver cargo to the ISS and ensure its safe return to Earth.
It is the second major ESA contract for The Exploration Company -- a start-up only launched in 2021 -- after it also won a bid to deliver cargo to US private developer Axiom Space's planned commercial space station.
Aschbacher signed contracts with The Exploration Company's CEO Helene Huby and Massimo Comparini from Thales Alenia Space at a space summit in Brussels on Wednesday.
The ESA faces soaring competition in the space sector, both from private firms such as Elon Musk's SpaceX and states like China and India.
It has also suffered a series of launcher setbacks, including Russia pulling its Soyuz rockets due to European sanctions over the Ukraine war.
Meanwhile the long-delayed first launch of the ESA's next-generation Ariane 6 rocket is now scheduled for the first half July, the agency said this week.
Also at the summit on Wednesday, the agency announced that 12 nations had signed onto its Zero Debris charter, which aims to reduce the amount of space junk building up around Earth.
Austria, Belgium, Cyprus, Estonia, Germany, Lithuania, Poland, Portugal, Romania, Slovakia, Sweden and the UK all signed up, the ESA said.
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