(Pocket-lint) - Intel is reportedly working on its own augmented reality headset that could be the biggest jump forward yet. The lines between the virtual and real worlds are about to blur.

According to sources of the Wall Street Journal, Intel is working on an AR headset that will set the trend for manufacturers. It plans to incorporate its 3D RealSense camera tech which should mean accurate detection of objects as well as hand gestures.

This could finally be the key to finding the Holy Grail of AR, where virtual objects can be manipulated physically as if they were really there. Yes, just like Iron Man does.

Intel's plan is reportedly to offer the headset design tech to other manufacturers to build. Commenting on this, Intel's VP, Achin Bhowmik, said: "We have to build the entire experience ourselves before we can convince the ecosystem".

Intel bought Recon Instruments in 2015, which has specialised in head worn displays for years now. Another source claimed that Intel was also working with Microsoft which is working on its similar HoloLens AR headset.

Now we just need to hope Magic Leap gets involved and the future of gesture controls of virtual objects could be close – just like this video shows.

READ: What is Magic Leap and why might it kill all screens?

Writing by Luke Edwards.