The Block III satellites are expected to allow military and civilian users to determine their position within 1m, compared with 3m with current technology.
Higher-powered signals from Block III satellites are expected to be harder for enemies to jam and easier for receivers to tune into, especially in urban canyons or under thick tree canopies.
The US and other countries have agreed to make a new, common frequency available to civilians. That means civilian receivers could calculate their position from a number of different satellite navigation systems.
Workers at Lockheed Martin's US$80 million ($106 million) test facility at Waterton Canyon will do final assembly work on the prototype and then run it through a gauntlet of tests.
The prototype won't be launched into space. The first flight model is expected to arrive at Waterton Canyon next year and be launched in May 2014.
Flying versions of the satellite will go through final assembly process and be subjected to extreme temperatures that mimic conditions in space.
Lockheed Martin has a US$1.5 billion Air Force contract to build and test the GPS III prototype and build the first two satellites for launch. The contract includes an option for 10 more.
The company expects the Air Force to authorise construction to begin on the third and fourth flight satellites later this month.
The Pentagon expects to buy and launch a total of 32 Block III satellites. The Air Force says it will cost about US$5.5 billion to design, build and launch all the satellites and upgrade the ground control systems.
The number of planned satellites helps reduce costs, said Keoki Jackson, Lockheed Martin program director for GPS III.
"GPS is unlike most space programmes," he said. "The Air Force gets the advantage of mass procurement."
Other savings are expected from the satellite's design, which can accommodate technology updates with few physical changes, and from its planned operating life of 15 years compared with seven to 12 years for most military satellites, Jackson said. AP
