Mattel Inc. says the doll will be available online next fall. The doll is part of the Barbie "Shero" line that honors women who break boundaries. Past dolls have included gymnast Gabby Douglas and "Selma" director Ava DuVernay.
Muhammad said on Twitter that she was "proud" that young people will be able to play with "a Barbie who chooses to wear hijab!"
Muhammad, the first American to compete at the Olympics while wearing a hijab, won a bronze medal in fencing at the 2016 Rio Games.
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