MBDA will lead a consortium, which includes Qinetiq, Leonardo, GKN, BAE Systems, Marshall Aerospace and Defence, and Arke.
The consortium, known as Dragonfire, beat out rival bids from Thales UK, a Babcock-Raytheon team, Lockheed Martin and Rheinmetall.
The prototype is scheduled to be delivered for trials by 2019 as Britain plays catch up in a field dominated in the West by US and German developments.
Earlier this year, Lockheed Martin executives in the US said it was now possible to produce viable laser weapons capable of taking out small targets like missiles and trucks.
In 2014, the US Navy deployed a laser weapon onboard a warship for field testing.
Adm. George Zambellas, the head of the British Royal Navy, told an audience at the DSEI arms exhibition in London last year that the service was to test the prototype on a warship by the end of the decade.
In a statement, the MoD said MBDA will assess how the system can acquire and track targets at range and in varying weather conditions over land and water.
It won't be the first time the Royal Navy has carried a laser weapon onboard one of its warships.
A laser was secretly developed by British scientists and deployed to the Falkland Islands during the war with Argentina in 1982. The weapon was meant to dazzle Argentine pilots but was never actually used.
The new laser demonstrator is part of a wider program being studied by DSTL, which includes the potential of radio frequency-directed energy weapons.
Andrew Chuter is the United Kingdom correspondent for Defense News.
