WASHINGTON — The Environmental Protection Agency on Thursday proposed a stricter standard for smog-causing pollutants that would bring substantial health benefits to millions of Americans while imposing large costs on industry and local governments.

The standard would replace one set by the Bush administration in March 2008, which has been challenged in court by state officials and environmental advocates as too weak to adequately protect human health and the environment.

The Obama administration’s proposal sets a primary standard for ground-level ozone of no more than 0.060 to 0.070 parts per million, to be phased in over two decades. Regions with the worst smog pollution, including much of the Northeast, Southern and Central California and the Chicago and Houston areas, would have more time than other areas to come into compliance.

The new rule would replace the standard of 0.075 parts per million imposed by the Bush administration over the objection of an E.P.A. scientific panel, which wanted a tighter limit. The previous standard of 0.084 parts per million was set in 1997 by the Clinton administration.

The Obama administration is also proposing a secondary smog standard that would vary with the seasons to protect plants and trees from repeated exposure.

The agency estimated that complying with the new standard would cost $19 billion to $90 billion a year by 2020, to be largely borne by manufacturers, oil refiners and utilities. But the agency said that those costs would be offset by the benefits to human health, which it valued at $13 billion to $100 billion a year in the same period.

The new standard would force hundreds of counties that meet the current law to take costly steps to get back into compliance. Under the current standard of 0.075 parts per million, 322 counties of the 675 that monitor ozone levels are out of compliance. If the 0.070 limit is adopted, 515 counties would be out of compliance. Only 15 of the 675 monitored counties now meet the 0.060 standard.

In areas that do not meet the new standards, state and local governments will have to impose regulations to reduce the pollutants that produce smog, using technologies that have already cut such emissions from smokestacks, tailpipes and manufacturing plants, or new technology as yet uninvented. The nearly 40-year history of the Clean Air Act has shown that science — and the threat of costly penalties — have given industry the tools and incentive to find ways to cut ozone-producing gases.

Penalties for noncompliance include fines and loss of federal highway financing.

Agency analysts project that if the stricter standard is adopted, as many as 12,000 premature deaths per year from heart or lung diseases could be avoided, along with thousands of cases of bronchitis, asthma and nonfatal heart attacks.

“E.P.A. is stepping up to protect Americans from one of the most persistent and widespread pollutants we face,” Lisa P. Jackson, the agency’s administrator, said in a statement. “Smog in the air we breathe poses a very serious health threat, especially to children and individuals suffering from asthma and lung disease. It dirties our air, clouds our cities and drives up our health care costs across the country.”

Smog or ground-level ozone is not emitted by a single source, but is, according to the E.P.A., formed by a reaction of nitrogen oxides, volatile organic compounds, carbon monoxide and methane in the presence of sunlight. The main sources of these pollutants are power plants and factories, fumes from volatile solvents, vehicles emissions and gasoline vapors. Smog is worse in the summer because of heat and sunlight, and can travel hundreds of miles from its source and affect small towns, rural communities and wilderness areas.

The leader of an association of air-quality enforcement agencies welcomed the proposal.

“This is exactly what states and localities have advocated for 30 years,” said S. William Becker, executive director of the National Association of Clean Air Agencies. “This will not be easy to achieve, whichever number the E.P.A. ultimately chooses, but it’s a decision that will ensure that public health is protected with an adequate margin of safety.”

Mr. Becker also said that the projected costs of compliance were likely to be lower than the agency’s estimate. “And the benefits will likely trump the costs many times over,” he said.

The American Petroleum Institute, the oil companies’ chief lobby, criticized the proposal as costly and likely to be ineffective. The group said there was no new scientific basis for changing the standard set at the end of the Bush administration.

“To do so is an obvious politicization of the air-quality standard-setting process that could mean unnecessary energy cost increases, job losses and less domestic oil and natural gas development and energy security,” the group said in a statement issued minutes after the agency’s announcement.

The trade association for electric utilities, the Edison Electric Institute, reacted warily.

“We probably won’t know for a couple of years just what utilities and other emissions sources will be required to do in response to a tighter ozone standard,” said John Kinsman, the institute’s senior director for the environment. “States will have to cast a very wide net when targeting sources for emissions cuts, in part because utilities already have made substantial reductions in ozone-related emissions.”

The E.P.A. will take public comment on the proposal for 60 days and expects to issue a final rule in August with a single standard between 0.060 and 0.070 parts per million. By the end of 2013, states must submit plans showing how areas that do not attain the new standard will be brought into compliance. The new rules would be phased in between 2014 and 2031, with deadlines depending on how dirty the air is in a given region.

Frank O’Donnell of Clean Air Watch, an advocacy group, said that the ozone rule was the most significant environmental action the Obama administration was likely to take this year.

“This will ultimately mean cleaner air all across America,” Mr. O’Donnell said. “This is going to drive pollution control into the next decade and beyond.”