A spokesman for the Federal Aviation Administration said the agency was notified of the non-working warning light in November, after a Lion Air 737 Max crashed on October 29 in Indonesia. The faulty sensors activate an anti-stall software that sent both planes into a nose-dive.
Boeing's latest disclosure raises new questions about the 737 Max's development and testing - and the company's lack of transparency.
The sensors malfunctioned during an October flight in Indonesia and another in March in Ethiopia, causing software on the planes to push their noses down.
Boeing had told airlines and pilots that the so-called AOA disagree warning was standard across the Max fleet, as on a previous generation of 737 jets. The two statements, made to aircraft customers, were meant to make it known that an optional piece of software was available to help better ensure aircraft safety.
It was only after a second MAX accident in Ethiopia almost five months later, these officials said, that Boeing became more forthcoming with airlines about the problem. "It's obviously troubling that here is something else Boeing didn't get to us".
"Boeing's timely or earlier communication with the operators would have helped to reduce or eliminate possible confusion", the FAA said.
In a statement Sunday, the company said its engineers became aware of a problem with the model's cockpit alert system roughly a year after beginning deliveries of the aircraft. In March, another 737 Max jet, this one belonging to Ethiopian Airlines crashed, killing 157 people.
Boeing's statement makes it evident that despite knowing the flaw, Boeing's engineers chose to go slow with the logic that "the existing functionality was acceptable until the alert and the indicator could be delinked in the next planned display system software update".
Rockwell Collins, which was acquired past year by United Technologies, provides the cockpit displays and flight-control computers for the 737 Max.
Boeing shares fell 2,7 percent to $366.45 before the start of regular trading on Monday in NY as USA stock futures slumped on trade-war anxiety. It's not clear if Boeing alerted its airline customers to the issue.
"Why weren't the manuals changed?"
If it had been working, the warning light would have lit up on the fatal flights of both the Lion Air and Ethiopian jets.
"So you have to kind of wonder are these people really there and are they sitting around the table helping Boeing oversee its strategy? We don't know what we don't know". It said it would deal with the problem in a software update.
Boeing contends the alert function was not necessary for the safe operation of the airplane.
Boeing didn't tell airlines or the FAA about this decision. Only after the crash of Indonesian Lion Air Flight 610 last November did the company issue a bulletin revealing that the light did not work as advertised.
It believed the issue could be resolved in a later system update. The tactic employed by Boeing is claimed to have paid off as the company landed new orders for the plane, convincing Lion Air to keep a multi-billion dollar order. The last major milestone is an FAA certification flight that the company expects to conduct shortly.