Unveiling an ambitious space policy on Wednesday, Bush said the moon would become the stepping stone for further exploration to the space beyond, such as Mars.
"We will build new ships to carry man forward into the universe, to gain a new foothold on the moon, and prepare for new journeys to the worlds beyond our own," Bush said at the headquarters of the National Aeronautics and Space Administration (NASA).
The White House said the initiative would be a peaceful effort in which the US intended to cooperate with other countries such as Russia.
"America will return to the moon as early as 2015 and not later than 2020 and use it as a stepping stone for more ambitious missions," the White House said in a statement released before Bush's official announcement of the plan.
"The experience and knowledge gained on the moon will serve as a foundation for human missions beyond the moon, beginning with Mars," it said.
Under the plan, the US will phase out its remaining space shuttles by about 2010 and replace them with a new "Crew Exploration Vehicle."
The White House stressed the new missions were not aimed at triggering another space race with other nations.
But it reeked of one nevertheless. Particularly since China, which launched its first manned space flight last year, has announced it will send a spacecraft to orbit the moon within three years and plans an unmanned landing in 2010.
India has also announced plans of sending an unmanned mission to the moon by 2008.
"We will build new ships to carry man forward into the universe, to gain a new foothold on the moon, and prepare for new journeys to the worlds beyond our own"
US president George Bush
"You always want the strategic high ground," US Republican Senator Sam Brownback said.
Alice Slater, head of the Global Action Centre for the Environment, warned the new policy "will create a new arms race to the heavens."
Unveiled with an eye on this year's e presidential elections, critics slammed the initiative as a financial absurdity.
Many found the plans too expensive at a time when the federal budget deficit is expected to top $500 billion this fiscal year alone.
"I think it's just a total fiscal absurdity. Bush has been spending money like we have got money to burn, and we don’t," Stephen Moore, president of the Club for Growth, conservative group said.
The initiative would also help extend US military supremacy.