The doll, part of the toymaker's "Sheroes" collection, is dressed in fencing gear as well as the hijab.
It will be on sale online from 2018, a spokeswoman told AFP.
"We are so excited to honor @IbtihajMuhammad with a one-of-a-kind #Barbie doll! Ibtihaj continues to inspire women and girls everywhere to break boundaries," Mattel wrote on its social media accounts, accompanied by a photo of Muhammad holding the doll.
On its website, Mattel said the new Barbie is "inspiration for countless little girls who never saw themselves represented in sports and culture," adding it hopes the doll "shows girls they can be anything."
Meanwhile, 31-year-old Muhammad described the doll created in her image as a "childhood dream come true."
It is not the first time Mattel, which is currently facing financial difficulties, has honored an American Olympian with a doll.
In 2016, the group released a Barbie created in the image of gymnast Gabby Douglas, the individual all-around champion at the London 2012 Games.
Mattel's latest announcement comes as The Wall Street Journal reports rival Hasbro plans to buy the toy manufacturer.