Officials at the Bureau of Engraving and Printing said they're examining 1.1 billion of the notes to determine how many will have to be destroyed.
According to a source, the bills cost about 12 cents each, which means the government spent about $120 million to produce bills it can't use. Simultaneously, they're trying to determine how they're going to quickly check the quality of all the new bills.
Bureau spokeswoman Darlene Anderson said officials believe a large proportion of the new bills will pass inspection and be placed into circulation.
The bills have been redesigned with sophisticated elements aimed at thwarting counterfeiters, which include a disappearing Liberty Bell in an inkwell and a bright blue security ribbon that is composed of thousands of tiny lenses.
Those lenses magnify the objects underneath them to make them appear to be moving in the opposite direction from the way the bill is being moved.
The currency had originally been scheduled to go into circulation on Feb. 10, but Anderson said a new date will not be set until the production problems are resolved.
The $100 bill is the last note to undergo an extensive redesign in an effort to thwart counterfeiters armed with ever-more sophisticated copying machines.
The Associated Press Contributed to this report.
