UK defence giant BAE Systems has been chosen to further develop its 'anti-insurgent' missile system for the US military.
The Naval Air Systems Command said it intends to enter into sole source negotiations with the US subsidiary of the British firm to develop the Advanced Precision Kill Weapon System II (APKWS II).
The project expands integration into the arsenal used on aircraft, including the A-10 'Warthog'. The existing semi-active laser-guided APKWS system is designed as a cheaper alternative to the Hellfire missile, at around a third of the cost - $30,000 (£17,000).
The Hellfire has become renowned for use on Predator and Reaper drones and was originally designed to target armoured vehicles. The APKWS is designed to destroy lightly armoured and "soft" vehicles, moving or stationary, in urban locations. It can be armed with high explosives or flechettes - steel darts - in the warhead.
Earlier this year trials were carried out firing the missile from the A-10 and the new missiles hit within inches of their target. It is based on a 2.75 in (70 mm) rocket with guidance 'canard' lead fins, and the new version has improved laser control for accurate targeting. The original development plan for the precision weapon began in 2002 and the first version has been in full production for three years and used in war zones such as Afghanistan.
It has been fired from more than a dozen aircraft types and been sold to US allies including Jordan, for use on its airborne gunships. BAE Systems programme manager Joe Tiano told Sky News: "Our APKWS laser-guided rocket has a long history of success in theatre and in testing on multiple platforms including the A-10, and we look forward to exploring additional opportunities for integration on the A-10."