Saab signed a three-year contract with the U.S. Army to supply the Carl-Gustaf M4 weapon system.

The 84mm recoilless rifle, which is designated as M3E1 in the United States and is known as the "Gustaf Bazooka," will first be delivered this year at a cost of $19 million, Saab announced Tuesday.

In all, the Pentagon can place orders for approximately $40.8 million with the Swedish-based company.

"This agreement is the result of many years of great cooperation between Saab and the U.S. government," Gorgen Johansson, head of Saab business area dynamics, said in a statement. "The order clearly demonstrates the confidence that the user has both in the capability of the Carl-Gustaf system as well as in Saab as a supplier."

The Carl-Gustaf Weapon System was first introduced in 1948 to support dismounted infantry.

The new weapon is fully backwards compatible with all ammunition types, including future ones, and and weighs significantly less than its M3 predecessor, according to Saab.

The latest version reduces the launcher weight from 22 pounds to less than 15 1/2 pounds.

"The Carl-Gustaf has been a force multiplier and the support weapon of choice for U.S. Special operations forces for many years," Erik Smith, president and CEO of Saab Defense and Security USA, said in a statement. "With the system now being fielded to light infantry units in multiple theaters and now to the U.S. Marines as well, the game changing capabilities of this weapon system and the flexibility provided by the multiple munition types available to the operator will deliver even greater value to the American warfighter."

The weapon, which can fire six rounds per minute, has been used by the 82nd Airborne Division in Afghanistan.

"It has been used with great success," Sgt. Raymond Miller, a small arms gunner within the division, said in a Saab news release. "The Taliban had been sending harassing fire out at long distance because previously we did not have effective fires out past 600 meters. The capability that the Carl-Gustaf brought to play was a game changer in that it gave us something to reach out past that and be able to deter them."

He said the system is rugged, durable and easy to operate in parachute assaults. In addition, it is reusable.

"The Carl-Gustaf's simplicity is one of its biggest strengths," said Miller, who has served 19 years in the military, including in Iraq. "When you're in combat, batteries can go flat and screens and lenses can break. But I have never heard of a Carl-Gustaf having any of those kinds of issues."

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