Developer Tragnarion Studios will use Epic's Unreal Engine 3 for the forthcoming title The Scourge Project.
The multiplatform FPS has a strong emphasis on co-operative squad play.
The game is due for release next year on PC and consoles.
Carl Jones, head of Tragnarion Studios, said: "We've been amazed at the speed and quality of results on Unreal. We've only had the engine for a couple of months, yet we've already been able to build a great-looking, fully playable prototype, which we'll soon show to publishers, featuring our innovative narrative system for multiple players and our unique co-op focused game play mechanics. Every single feature we want is easily implemented in Unreal - for all the major high-end platforms."
Epic’s vice president Mark Rein added: "When we saw the demo that Tragnarion produced, we were really impressed with the progress they had made in such a short time. The high quality visuals, innovative game features and co-operative story have come together in only a few months. It made us very proud to see how quickly they were able to learn Unreal Engine 3 and we can't wait to get a look at this title again in a few more months."