BAE Systems has been awarded a new contract from the US Army which will see it continue to produce explosives at a plant in Tennessee.
The new deal is worth as much as 780 million US dollars (£512 million) over the next five years and includes a further order for IMX-101 munition that is seen as a safe and effective replacement for TNT in artillery rounds.
The new contract comes as a boost for the UK company as it grapples with the impact of government spending cuts on both sides of Atlantic.
BAE developed IMX-101 and has fielded it in partnership with the Army at the Holston plant in Tennessee, which the company operates for the US government.
IMX-101 is part of a new family of explosives under development called Insensitive Munitions Explosives (IMX). These formulations are significantly more stable than conventional TNT, making the weapon systems they support safer for troops to transport and handle.
Erin Moseley, president of BAE Systems' Support Solutions, said: "The work we do at Holston is critical to the defence of our nation and to the safety of our men and women in uniform.
"IMX-101 is truly innovative and is revolutionising military ordnance. Once fully fielded, it will help to save lives on and off the battlefield."
BAE has been the operating contractor of the Holston plant since 1999, developing a wide range of explosive formulations for both military and commercial applications.
Last year the company became the operating contractor of the Radford Army Ammunition Plant in Virginia, where BAE manufactures a range of propellants for military munitions.