The futuristic-looking helmet offers a bit of Iron Man-meets-Aquaman in what the Naval Surface Warfare Center calls "next-generation" technology.
Dubbed the Divers Augmented Vision Display, the augmented reality technology is embedded directly inside the helmet.
"By building this [heads up display] directly inside the dive helmet, instead of attaching a display on the outside, it can provide a capability similar to something from an Ironman movie," Dennis Gallagher, the Navy's Underwater Systems Development Project Engineer, said in a statement. "You have everything you visually need right there within the helmet."
The smart helmet has been demonstrated to about 20 military divers so far.
The Navy expects to conduct in-water simulation testing in October, with expanded field testing set for 2017.
The military has not specified when the helmets could be in actual usage.
According to the Navy, the new helmet is expected to be used by military divers doing underwater construction, searches and salvage operations. It also could be used by first responders and commercial divers.
The technology is designed to aid divers by giving them visuals of exactly what they're looking for, mapping information and messages from the surface.
The military also noted that it is working on sensors, particularly video systems and sonar, that individual divers could use in murky conditions with the data being fed directly into the smart helmets.
"We constantly engage with the operators; if there is a vision they have, we can make it happen," Gallagher said. "By having this type of positive on-the-spot feedback, you know you're going down the right road."