The weapon, designated by ATK as the XM25, is a semi-automatic weapon for use by individual soldiers in engaging concealed targets.
ATK said the airburst round is programmed by an integrated target acquisition and fire control system on the rifle that adjusts the aim point based on range, environmental factors and user inputs.
Prototype XM25s have undergone forward operational assessments by the Army in Afghanistan, where troops used the weapons in combat areas.
The engineering and manufacturing development contract modification from the U.S. Army's Program Executive Office Soldier allows ATK to continue design, integration, production and testing of fully functional XM25s, ensuring that the final design meets performance requirements-ready prior to production and fielding.
"The XM25 has been battle-proven by our soldiers during U.S. Army operational assessments conducted in Afghanistan," said Bruce DeWitt, vice president and general manager of ATK's Armament Systems Division. "We are very pleased with this system's performance and the overmatch capability it delivers to our warfighters.
"We are focused on quickly making this weapon ready for production."
ATK is the prime contractor, systems integrator and ammunition provider for the XM25 program and is working on the weapon's development with Heckler and Koch and L-3 Communications' Integrated Optical Systems.
2014: NFL Cheerleaders [PHOTOS]
Iraq seeks thousands of tank rounds