Currently around five people a year are killed at level crossings in Britain with hundreds of reported near misses.
The new enhanced warning devices have been dubbed Meerkats after the cautious creature.
They will detect an oncoming train and provide an audible and visible warning to alert users.
The contract will see Costain’s team work closely with Network Rail to develop the technology and the first units are expected to be installed within the next 12 months.
Work is already underway to design and develop the Meerkat solution which will be installed at sites across Britain over the next five years.
Andrew Wyllie CBE, chief executive at Costain, said: “Maintaining safety on the rail network is an important focus and the award of this contract demonstrates how smart infrastructure solutions can help save lives.”
Allan Spence, head of passenger and public safety at Network Rail said: “This is an important project which will help further reduce level crossing risk across the network.
“Meerkat will give users information on whether it is safe to cross and allow us to replace hundreds of Victorian ‘whistleboards’ – helping line side neighbours as well as improving safety.”