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Reuters reports that U.S. consumers who want the new iPhone, but don’t want the two-year contract with AT&T that goes along with it, will be able to buy it for an extra $400. The popular touch screen Wi-Fi-enabled ssmart will still be locked to AT&T for service, but a two-year contract will not be required to purchase the device.

For those electing to sign the two-year contract, the iPhone 3G (on sale July 11) will cost $199 (8GB) or $299 (16GB) versus $599 or $699 for those who opt for other AT&T plans. According to the Reuters report, however, this option may not be immediately available.

For more details, read “AT&T to Sell Apple iPhone Sans Contract.”