WASHINGTON – The Obama administration on Tuesday plans to order auto makers to increase the overall fuel economy of automobiles sold in the U.S. to 35 miles per gallon by 2016, four years faster than current federal law requires, people familiar with the matter told The Wall Street Journal.

The move is part of a broader overhaul of fuel-economy rules aimed at cutting greenhouse-gas emissions. Today�??s average fleet fuel economy standard is just 25 miles per gallon. The tougher standards are expected to cost the auto industry more than $50 billion to implement.

The Obama administration’s plan is expected to revamp federal standards to bring them into harmony with the goals of a California greenhouse-gas law. At the same time, auto makers have agreed to drop litigation challenging the legality of state-level curbs on tailpipe emissions of greenhouse gases, people familiar with the matter said.

An announcement of the agreement is expected Tuesday, with representatives of several large auto companies, including General Motors Corp. Chief Executive Fritz Henderson, as well as the president of United Auto Workers, Ron Gettelfinger, planning to participate, people familiar with the matter said.

The agreement worked out by aides to President Barack Obama represents a partial victory for the auto industry. The industry will be able to operate under a single national standard on fuel economy, rather than multiple regimes at the federal and state levels. Auto makers have long opposed California’s tailpipe emissions program as tantamount to state-level regulation of fuel economy, traditionally a federal responsibility.

But the standards will require huge investments by auto makers to remake their U.S. fleets so that they have roughly the same overall efficiency as vehicles they now sell in Europe, where gasoline is two to three times more expensive as in the U.S. By moving the 35 mpg requirement to 2016 from 2020, the administration is stepping up the pressure on the industry to overhaul its product lineup faster. It typically takes three to four years for auto makers to design and bring a new vehicle to market.

Last summer, the Transportation Department estimated that requiring auto makers to achieve 31.6 mpg by 2015 would cost the industry $46.7 billion, a sum the agency said would make it among the most expensive rule makings in U.S. history.

Complicating matters for the administration are the financial struggles of Chrysler LLC, which is now receiving government funding under bankruptcy court protection, and GM, which has said it could file for Chapter 11 bankruptcy at the end of May.

A 2007 energy law requires auto makers to boost the average fuel economy of their vehicle fleets to at least 35 mpg by 2020, a 40 percent increase from the roughly 25 mpg standard for the current fleet.

California has estimated its standards would require auto makers to achieve 35 mpg by 2017. Unlike the federal government, which gives auto makers compliance credits for churning out “flex-fuel” vehicles capable of running on high levels of ethanol, California requires auto makers to prove motorists are actually filling up on those high-level blends in order to claim credit.

“If there’s one number, the auto industry has one burden,” said Lena Pons, a policy analyst at Public Citizen, a Washington-based group that advocates tougher vehicle fuel economy standards.

According to two industry officials familiar with the plan, mileage standards would rise slowly at first — from a combined requirement of 27.3 miles per gallon for cars and trucks in 2011 — and faster approaching roughly 35 mpg in 2016. That would give auto makers more time to adjust — and collect credits if they can manage to exceed earlier targets — before the steeper increases kick in.

Federal regulators apply different mileage requirements to cars and light trucks. A manufacturer’s fleet of cars currently has to meet an average standard of 27.5 miles per gallon, and that will rise to roughly 42 mpg in 2016 under the administration’s new plan. Trucks must hit an average standard of 23.5 miles per gallon in 2010, and that will rise to about 26 in 2016. Together, an auto maker’s mix of cars and trucks will have to meet the average mileage requirement of 35 mpg in 2016, up from 25.3 today.

Under the plan, the Environmental Protection Agency and the Department of Transportation will work together on the rules raising fuel-economy standards and reducing greenhouse-gas pollution. It is unclear how quickly the EPA and the Transportation Department’s National Highway Traffic Safety Administration will be able to make a formal proposal. The EPA on Monday was holding a public hearing on its proposal to find that greenhouse gases endanger public health, the first step toward regulating them.

Obama’s initial pick to lead NHTSA, Charles Hurley, took himself out of consideration last week. Mr. Hurley had come under criticism from environmental groups over past statements that higher mileage standards could jeopardize motorist safety.

“Announcing this ahead of Memorial Day – the one week of the year the nation focuses on fuel economy – is very smart politics,” said Paul Bledsoe, a spokesman for the National Commission on Energy Policy, a Washington-based group that advises policy makers on energy issues.

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