Lockheed Martin announced Monday that the U.S. Army had awarded it a contract worth nearly $5 billion to produce its next-generation long-range precision strike missile.

The contract is worth up to $4.94 billion and will see Lockheed Martin provide Precision Strike Missiles (PrSM) to the Army, which views the weaponry as the successor to the Army Tactical missile (ATACM).

The missiles are compatible with the High Mobility Artillery Rocket System (HIMARS) and Multiple Launch Rocket System (MLRS), platforms used by the Army and Marine Corps along with a number of U.S. allies that have acquired those systems or intend to.

"Lockheed Martin is committed to delivering this deterrent capability in support of the Army's vision for a lethal and resilient force," said Carolyn Orzechowski, VP of Ppecision fires launchers and missiles at Lockheed Martin. "Our team remains focused on advancing the production at speed and scale, ensuring the warfighter receives this critical capability to maintain peace through strength."

According to Lockheed, the PrSM has a range beyond 499 kilometers, or 310 miles, and it was designed with an open architecture that allows the capability to be improved incrementally to achieve longer ranges. 

The company has worked on several variants of the PrSM, including versions designed as land-based anti-ship missiles, longer-range variants and to carry different explosive munitions.

The Army's PrSM contract is structured as an indefinite delivery, indefinite quantity contract, which is designed to provide flexibility when the exact quantity or delivery schedule is unknown.

Though this PrSM contract is for the Army, the U.S. Marine Corps as well as the Australian Army have indicated they intend to acquire the PrSM.

Lockheed Martin securing the precision strike missile contract comes after it missed out on the Air Force's next generation air dominance (NGAD) fighter jet contract, which is valued at more than $20 billion and was awarded to Boeing to replace Lockheed's F-22 Raptor.