The Biden administration said it has reached a $230 million deal with Australian diagnostics company Ellume USA LLC to produce at-home, over-the-counter Covid-19 tests.

The Food and Drug Administration previously authorized the test. So far, the FDA has cleared three Covid-19 tests that can be processed entirely at home, but Ellume’s is the only one that doesn’t require a prescription. None are widely available at this point.

The company is expected to produce 19 million tests a month by the end of the year,

Andy Slavitt,

senior adviser to the White House Covid-19 response team, said Monday. Based on the agreement, 8.5 million tests will be guaranteed to the U.S. government.

For months, public health authorities have been calling for rapid, easy-to-use tests for Covid-19 that can be performed anywhere, both to enable people to quickly determine whether or not they have Covid-19 and to allow for wider screening. At-home tests are expected to be less precise than those done in a lab and will likely require a follow-up test in certain situations.

The company shipped out its first batch of 10,000 tests to the U.S. the week of Jan. 18, a spokeswoman for Ellume said in a statement last week. Ellume had originally aimed to ship 100,000 tests a day starting in January. The company didn’t immediately respond to requests for comment.

The company is looking in Maryland, Virginia, California and other states for a location for its first U.S. production facility, the spokeswoman previously said.

Ellume’s test is expected to cost around $30 and requires a smartphone, the company has said. The test is authorized to be used by people both with and without symptoms. It can also be used on children as young as 2 years old.

Mr. Slavitt said the government’s announcement Monday was a step toward mass production and lowering prices. “There’s a chicken and egg problem, which we have taken a step to solve today,” he said during a briefing.

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The company previously received $30 million from federal authorities as a part of the Rapid Acceleration of Diagnostics initiative run through the National Institutes of Health.

To run the test, a person uses a nasal swab and inserts their sample into the analyzer. The test searches for pieces of virus proteins, called antigens.

The test results are then transmitted to the person’s phone via Bluetooth, where the person can choose to share the results with a health-care provider. The result can’t be accessed without downloading the app, the company says.

The mobile application requires users to input their ZIP Codes and dates of birth. Names and email addresses are optional. The information is sent to public-health authorities.

Write to Tarini Parti at Tarini.Parti@wsj.com and Brianna Abbott at brianna.abbott@wsj.com

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