WARRENVILLE, Ill. — The IC Bus plug-in hybrid school bus will be further developed into a vehicle capable of all-electric drive for extended periods, under a federally supported projected announced Friday.

The U.S. Department of Energy (DOE) selected IC Bus parent Navistar for a cost-shared award of up to $10 million — which would be half the total projected cost — as part of the DOE’s Plug-In Hybrid Electric Vehicle Technology Acceleration and Deployment Activity program.

During the three-year project, Navistar will develop and deploy 60 of the proposed vehicles to fleets across the nation. The bus will have engine-off driving capability, which is not available on the current IC Bus hybrids.

The DOE said in a statement that the project will help meet President Obama’s goal of putting 1 million plug-in hybrid vehicles on the road by 2015.

“By investing in the vehicles of the future, we will create new jobs while reducing our dependence on foreign oil and improving our environment,” Energy Secretary Steven Chu said.

Daniel Ustian, Navistar chairman, president and CEO, said that, “By using plug-in electric vehicle technology in school buses, we have the privilege and opportunity to allow a generation of U.S. children to grow up with the expectation that, as part of their everyday commute to school, electric transportation is a reality.”

Development will include examining hybrid architectures to achieve a 40-mile electric range, evaluating advanced energy storage devices and operating on an emissions-compliant diesel engine capable of running on renewable fuels.