Orbital ATK is set to start production of the M829E4 advanced kinetic energy 120mm tactical tank cartridge.
The company recently completed first article acceptance testing of the round, and expects to be awarded full material release decision prior to 2016.
Orbital ATK Armament Systems division Defence Systems Group vice-president and general manager Dan Olson said: "During our more than 30 years of large calibre ammunition programme experience with the Army, we have now partnered with the US Army to type classify 11 of the 13, 120mm tactical and training rounds for the Abrams tank.
"From initially providing the 120mm ammunition that 'upgunned' the Abrams from a 105mm to a 120mm main gun platform until today, our company has made it a business priority to partner with the Army to maintain the Abrams' standing as the world's dominant tank."
The company's existing M829E4 production contract includes the first year's production and exercisable options for two follow-on production years with a total value of $80m.
An additional five-year, production contract is expected to fulfil army inventory requirements.
The ammunition contracts are awarded through the Army Manoeuvre Ammunition Systems through its role as the Single Manager for Conventional Ammunition, the organisation responsible for the purchase of ammunition for all US Armed Services.
An armour piercing fin stabilised, discarding sabot with tracer cartridge, the M829E4 is the army's fifth generation, 120mm kinetic energy cartridge featuring a penetrator that can defeat all current, modern armour protection suites as well as future armour protection concepts.
The cartridge features an advanced design, long-rod penetrator and an exclusive composite sabot that allows for the most efficient transfer of energy to maximise the rod's penetrating power.
According to the company, the use of a unique propellant blend maintains a consistent muzzle velocity across operational temperatures ranging from extreme cold to extreme hot.
In addition, the advanced combustible cartridge case incorporates a relocated skive joint placement that enhances armour crew safety during handling.