If it succeeds, cyborgs will be a reality.
The Pentagon's research arm, the Defense Advanced Research Projects Agency (DARPA), hopes the implant will allow humans to directly interface with computers, which could benefit people with aural and visual disabilities, such as veterans injured in combat.
The goal of the proposed implant is to "open the channel between the human brain and modern electronics" according to DARPA's program manager, Phillip Alvelda.
In January, DARPA announced it plans to spend up to $62 million on the project, which is part of its Neural Engineering System Design program.
The implant would be small -- no larger than one cubic centimeter, or roughly the size of two stacked nickels -- according to DARPA.
The implantable device aims to convert neurons in the brain into electronic signals and provide unprecedented "data-transfer bandwidth between the human brain and the digital world," according to a DARPA statement announcing the new project.
DARPA sees the implant as providing a foundation for new therapies that could help people with deficits in sight or hearing by "feeding digital auditory or visual information into the brain."
A spokesman for DARPA told CNN that the program is not intended for military applications.
But some experts see such an implant as having the potential for numerous applications, including military ones, in the field of wearable robotics -- which aims to augment and restore human performance.
Conor Walsh, a professor of mechanical and biomedical engineering at Harvard University, told CNN that the implant would "change the game," adding that "in the future, wearable robotic devices will be controlled by implants."
Walsh sees the potential for wearable robotic devices or exoskeletons in everything from helping a medical patient recover from a stroke to enhancing soldiers' capabilities in combat.
The U.S. military is currently developing a battery-powered exoskeleton, the Tactical Assault Light Operator Suit, to provide superior protection from enemy fire and in-helmet technologies that boost the user's communications ability and vision.
The suits' development is being overseen by U.S. Special Operations Command.
In theory, the proposed neural implant would allow the military member operating the suit to more effectively control the armored exoskeleton while deployed in combat.
However, Steven Pinker, a cognitive scientist and professor of psychology at Harvard, was skeptical of the proposed innovation, calling the idea a "bunch of hype with no results."
He told CNN, "We have little to no idea how exactly the brain codes complex information" and cited the problems from foreign objects triggering brain inflammation that can cause serious neurological issues.
Pinker described "neural enhancement" for healthy brains as being a "boondoggle," but he suggested that there could be some benefit for people suffering from brain-related diseases such as amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig's disease.
In its announcement, DARPA acknowledged that an implant is still a long ways away, with breakthroughs in neuroscience, synthetic biology, low-power electronics, photonics and medical-device manufacturing needed before the device could be used.
DARPA plans to recruit a diverse set of experts in an attempt to accelerate the project's development, according to its statement announcing the project.
Pinker remained skeptical, however, telling CNN: "My guess is that it's a waste of taxpayer dollars."