With a top speed of around 2,300 mph (3,700 km / h), it could fly from London to Sydney in just five hours – or New York in less than two.
Virgin has teamed up with engine manufacturer Rolls-Royce to work on the concept, which is still in its early stages.
The delta-winged jet would sail over 60,000 feet (18,300 m), much higher than current passenger planes, but would only have room for nine to 19 passengers.
The plan is separate from Virgin’s offer to send customers to the edge of space to experience weightlessness – which has already performed a number of test flights using the SpaceshipTwo spacecraft. .
Supersonic passenger flights came to a halt when the Concorde retired in October 2003 and no one has so far bridged the gap for super-fast air travel.
Virgin said it has signed a memorandum of understanding with Rolls-Royce “to collaborate in the design and development of engine propulsion technology for high-speed commercial aircraft” and has also worked with NASA on the concept.
The company said the Mach-3 jet will target existing long-distance trade routes, normally taking off and landing at existing airports.
The next phase will look at things like what materials to use, how to reduce noise and emissions, and how to keep the jet cool when flying supersonically.
The US aviation regulator, the FAA, has also agreed to help work on a certification framework for the aircraft.
Other companies are also aiming for a new era of super-fast air travel.
Among them, the aerospace giant Lockheed-Martin and the American start-up Boom Supersonic – which should reveal a reduced prototype this winter, followed by test flights in 2021.