The operating contract has an upper limit of over $1.3bn and will extend through to 31 December 2026.
BAE Systems Ordnance Systems unit will operate the plant that manufactures explosives, munitions, and propellants for the US Department of Defense.
It will be responsible for the management, production maintenance, sustainment and modernisation of the facility.
BAE Systems Ordnance Systems vice-president and general manager Brian Gathright said: “Our team members have focused on safety, quality, and teamwork over our last ten years at Radford.
“It is their dedication to the mission that made this award possible. Our organisation has the expertise to perform the work necessary to deliver reliable, innovative energetics to the Army and those who serve in uniform.”
Apart from the Radford facility, BAE Systems Ordnance Systems has also operated and worked on modernisation projects at the Holston Army Ammunition Plant in Tennessee since 1999.
According to BAE Systems, the latest contract extension shows its ‘strong relationship’ with the US Army.
The company has operated the ammunition plant since 2012.
In 2011, BAE Systems won a ten-year contract from the US Army to operate the Radford plant.
The $850m operating contract included three five-year options which, if fully exercised, will extend the contract period to 2036.