The $40 million Magdalena Ridge Observatory will use optical interferometry to merge light signals from three new telescopes into a single image. Researchers also hope to test new adaptive optics techniques in a attempt to reduce the effect of atmospheric turbulence. Using these methods the observatory should produce images sharper than those obtained from the Hubble Space Telescope at a fraction of the cost.

The observatory is being funded by the US Army who hope to use the telescope to observe missiles from the White Sands Missile Range.

The task of building and managing the observatory has been given to the New Mexico Institute of Mining & Technology (New Mexco Tech). The institute is part of the consortium that first proposed the facility to the army. According to Van Romero, vice president for research at New Mexico Tech, "this type of facility will become a tremendous resource."

The telescope will be unusual in that it will operate 24 hours a day. The military will use it during the day to observe missile tests, and universities will use it for astronomy at night. Researchers based in New Mexico hope to use the telescope to study extrasolar planets.