Ibtihaj Muhammad made history in Rio last year as the first U.S. Olympian to represent her country wearing a hijab, after earlier winning a gold medal in 2014 at the world fencing championships in Russia.
"I'm proud to know that little girls everywhere can now play with a Barbie who chooses to wear hijab! This is a childhood dream come true," the Olympian posted on Twitter late Monday.
Thank you @Mattel for announcing me as the newest member of the @Barbie #Shero family! I’m proud to know that little girls everywhere can now play with a Barbie who chooses to wear hijab! This is a childhood dream come true 😭💘 #shero pic.twitter.com/py7nbtb2KD— @IbtihajMuhammad
The hijab — one of the most visible signs of Islamic culture — is becoming increasingly popular with Western businesses, from hijab-wearing models in top fashion magazines to Apple's recently launched emoji character in a hijab.
The hijab-wearing Barbie, produced by company Mattel, is part of Barbie's "Shero" line which recognises women "who break boundaries to inspire the next generation of girls", and will go on sale in 2018, the company said.
"Ibtihaj is an inspiration to countless girls who never saw themselves represented," Barbie's marketing vice president Sejal Shah Miller said in a statement.
"By honouring her story, we hope this doll reminds them that they can be and do anything."
Many Muslim women cover their heads in public with the hijab as a sign of modesty, although some critics see it as a sign of female oppression.
Other dolls in the collection include African-American ballerina Misty Copeland, and filmmaker Ava DuVernay, director of Selma and the upcoming A Wrinkle in Time.
In November, Danish toymaker Lego released figurines of five women scientists, engineers and astronauts who worked for U.S. space agency NASA to inspire more girls to pursue careers in science.