The Chicago-based studio will transition onto the Xbox One fighting game after Double Helix finishes up the first season of content, including a title update which will re-introduce cyborg combatant Fulgore on April 9.
Iron Galaxy CEO Dave Lang told Polygon that taking over Killer Instinct is "probably the biggest thing we've ever done."
"Before we were ever talking about this, I was a fan of the game," Lang said. "And to get to now take it over and start with this great base, and expand it and put new stuff on top of it, everyone in the company is super pumped up, and we can't wait to show people what we're going to be doing down the road."
Iron Galaxy is now working with Double Helix to learn the game's proprietary engine in preparation for a second season of Killer Instinct content.
It's not an unfamiliar project: Iron Galaxy was a contender for the role when Microsoft initially looked for studios to remake the fighting game series. But the studio was already working on Kinect title Wreckateer at the time and didn't have enough resources to do both, Lang said.
Aside from Divekick and the upcoming Divekick Addition Edition, Iron Galaxy has worked on downloadable versions of classic fighting games like Street Fighter III: 3rd Strike Online, Marvel vs. Capcom Origins, and Darkstalkers Resurrection.