"The Iron Beam laser system is expected to fundamentally change the rules of engagement on the battlefield," Daniel Gold, head of defence ministry research and development, told a defence summit in Tel Aviv.
"With development complete and a comprehensive testing programme that has validated the system's capabilities," he added, promising to deliver "initial operational capability" by the end of the year.
The announcement comes as Israeli military steps up its strikes against the militant group Hezbollah and its infrastructure, despite a ceasefire that began just over a year ago.
Contacted by AFP, the defence ministry refused to provide more details on what exactly would happen on that date.
The announcement marks a major milestone in a project more than a decade old, developed jointly with the state-owned arms company Rafael and Israeli private defence group Elbit.
The laser system seeks to enhance Israel's interception of drones and other projectiles, and will supplement other aerial defence capacities such as the more well-known Iron Dome.
Iron Dome offers short-range protection against missiles and rockets. The David's Sling system and successive generations of Arrow missiles are Israeli-American technology built to bring down ballistic missiles.
During the 12-day war launched by Israel against Iran in June, the country's missile defence system failed to intercept all the projectiles fired by Tehran toward Israeli territory.
Israel has since acknowledged being hit by more than 50 missiles during the war with Iran, resulting in 28 deaths.
The new system is "a ground-based high-power laser air defence system designed to counter aerial threats", Rafael said.
The company added that the system has the "unique advantage of rapidly neutralising threats using laser technology at negligible cost".
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