The United States Monday reacted with alarm to news that Turkey has chosen a Chinese company, slapped with US sanctions, to build its first long-range air defense and anti-missile system.

China Precision Machinery Export-Import Corp (CPMIEC) beat out competition from a US partnership of Raytheon and Lockheed Martin, Russia's Rosoboronexport, and the Italian-French consortium Eurosamrs in the tender, worth $4 billion according to Turkish media.

Turkey is a key regional ally to the United States, and currently has US-built Patriot missile systems deployed on its border to deter incoming attacks from Syria.

CPMIEC has been hit by a series of US sanctions over the past decade, accused of selling arms and missile technology to Iran and Pakistan, meaning that all US groups and individuals are barred from doing business with it.

The United States has "conveyed our serious concerns about the Turkish government's contract discussions with a US-sanctioned company for a missile defense system that will not be interoperable with NATO systems or collective defense capabilities," State Department spokeswoman Jen Psaki said.

"Our discussions will continue," she told reporters.

An official statement from Ankara last week said Turkey had "decided to begin talks with the CPMIEC company of the People's Republic of China for the joint production of the systems and its missiles in Turkey."

Turkey wants to build its own long-range air defense and anti-missile architecture to counter both enemy aircraft and missiles.

In January, NATO began deploying Patriot missile system batteries to help protect Turkey from any spillover of the conflict in neighboring Syria.

The Patriot missiles, effective against aircraft and short-range missiles, were provided by the United States, Germany and the Netherlands.