AT&T have announced plans to sell a contract-free Apple iPhone 3G, although they will not allow users pre-pay service but instead still require a standard monthly plan.  Both the 8GB and 16GB version of the handset will be on offer, priced at $599 and $699 respectively.

That’s a $400 premium over and above the standard, contract price.  Assuming you’re willing to commit to a 24-month contract, the 8GB iPhone 3G costs $199 and the 16GB version comes in at $299.

While there’s no long-term obligation, the contract-free iPhone 3G’s are still locked to AT&T and use the same pricing plans.  That includes the $30 unlimited data access fee.  AT&T will begin selling the handsets next Thursday.