The U.S. has lost control of a spy satellite that may contain hazardous materials, and it could hit the Earth over the next two months, government officials said Saturday.

The satellite has lost power and is now floating freely around the Earth.

"If the satellite is as big as we think it is -- about as big as a school bus -- then parts of it could survive the fiery re-entry and hit the Earth," space analyst Randy Atwood told CTV News.

Officials speaking to The Associated Press on condition of anonymity said they have no idea where the satellite will hit.

Gordon Johndroe, a spokesman for the U.S. National Security Council, said appropriate government agencies are monitoring the situation.

"Numerous satellites over the years have come out of orbit and fallen harmlessly," he said. "We are looking at potential options to mitigate any possible damage this satellite may cause."

It's unknown whether the U.S. may attempt to destroy the spy satellite before it re-enters the atmosphere.

"It's not all that easy," said Atwood. "You're not going to shoot it down, you're just going to explode it into a million pieces that are ultimately going to fall on the Earth."

An anonymous government source told AP that the satellite contains a rocket fuel called hydrazine, which is a toxic chemical and can be harmful to anyone exposed to it.

In 1979, NASA's first space station, the 78-tonne Skylab, re-entered Earth's orbit earlier than expected. Debris rained down on the Indian Ocean and a rural stretch of Australia, but there were no reports of injuries or damage.

NASA was able to direct the de-orbit of the Compton Gamma Ray Observatory in 2002 by using the satellite's rockets. Officials managed to steer the observatory into the Pacific Ocean.

But in 2002, NASA said debris from a science satellite may have struck an area of the Persian Gulf, thousands of kilometres from where officials had thought the pieces would strike.

With files from The Associated Press