The Merkava 4 Barak, scheduled to be operational in three years, will be the latest of the Israeli Merkava tank series, which has traditionally focused on combatting the conventional forces of neighbouring Arab states.
The military said the new model reflected an understanding that the theatres of conflict it faces are changing.
"The enemy won't necessarily be states and armies, but rather an enemy that uses people," Brigadier General Guy Hasson, head of the army's armoured corps, said.
The "dual-use" tank contains technologies including a sensor system that gives its commander a full view of the surroundings in his helmet.
The model -- which will also be equipped with a computer system based on artificial intelligence -- is designed to be more secure in the confines of guerilla clashes.
The Israeli military has been using tanks along the border with Gaza, as tensions have risen during months of protests and clashes that have left over 140 Palestinians dead.
Israeli tanks have fired on positions belonging to Gaza's rulers Hamas, as well as individuals accused of attempting to infiltrate into Israel.
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