The headsets, based on commercially available HoloLens, will make soldiers safer and more effective, according to Microsoft technical fellow Alex Kipman.

The contract could be worth some $22 billion over the next 10 years, according to reports by CNBC and the Washington Post.

Microsoft will get an Integrated Augmentation System into rapidly into production under the terms of a production agreement.

"This award transitions IVAS to production and rapid fielding to deliver next-generation night vision and situational awareness capabilities to the Close Combat Force at the speed of relevance," the Defense Department said in a release.

A head-mounted display used by soldiers for battle and training will take advantage of sensors for night and thermal vision as well as engaging targets and making tactical decisions, according to the defense department.

"The program delivers enhanced situational awareness, enabling information sharing and decision-making in a variety of scenarios," Kipman said in a blog post.

The deal deepens the tie between the Redmond, Washington-based technology titan and the US military.

The defense department late last year said it is sticking with its decision to award a $10 billion cloud computing contract to Microsoft, despite Amazon's claims that former President Donald Trump improperly influenced the process.