The space agency's budget would grow to $19 billion in 2011 under the proposed budget released on Monday, with an emphasis on science and less spent on space exploration.
It "adds $6 billion to NASA's budget over five years and draws upon American ingenuity to enable us to embark on an ambitious 21st Century program of human space exploration," the budget proposal reads.
But the plan ends the Constellation program "which was planning to use an approach similar to the Apollo program to return astronauts back to the Moon 50 years after that program's triumphs."
The budget notes that an independent panel found the moon program was years behind schedule.
"Instead, we are launching a bold new effort that invests in American ingenuity for developing more capable and innovative technologies for future space exploration," it reads.
The new budget, which is subject to change by Congress, also extends operations at the International Space Station past its planned retirement date of 2016, suggesting such potential additions as inflatable space habitats.
Obama's proposal hands over more space operations to the commercial sector, saying it will create thousands of new jobs and hold costs down.
NASA already has spent $9 billion on Constellation and likely would owe millions more to cancel existing contracts. Prime contractors on the Ares rocket program include ATK Launch Systems, Pratt & Whitney Rocketdyne and Boeing Co.
Lockheed Martin is the lead contractor on the Orion capsule.
NASA already has contracts with Space Exploration Technologies and Orbital Sciences Corp to deliver cargo to the station. SpaceX and other firms also are developing spaceships that can carry passengers to orbit and back.
The budget also proposes a re-vamp of the Kennedy Space Center in Florida, where staff have feared major cutbacks, as part of making NASA more efficient.
"A major focus of this effort will be to create the 21st century launch facilities and infrastructure needed at Kennedy Space Center, transforming the facility to more effectively support future NASA, commercial, and other government launches," the budget reads.
Florida Senator Bill Nelson has promised to fight efforts to cut back NASA' Florida operations.