The laptop was designed to be used in developing countries
The South American country has bought 100,000 of the machines for schoolchildren aged six to 12.
A further 300,000 may be purchased to provide a machine for every child in the country by 2009.
The order will be a boost for the One Laptop per Child (OLPC) organisation behind the project which has admitted difficulties getting concrete orders.
"I have to some degree underestimated the difference between shaking the hand of a head of state and having a cheque written," Nicholas Negroponte, the founder of the organisation, recently told the New York Times.
However, he said he was "delighted" with the first deal.
"We commend Uruguay for being the first country to take concrete actions to provide laptops to all its children and teachers and look forward to other countries following this example," he said.
Rumour factory
The XO laptop, as the machine is known, has been developed to be used primarily by children in the developing world.
It is durable, waterproof and can be powered by solar, foot-pump or pull-string powered chargers. It includes a sunlight readable display so that it can be used outside and has no moving parts.
OLPC aims to sell the laptop for $100 or less. However, over the last year, the machine's price has steadily increased and now costs $188 (£93).
Governments were initially offered the green and white machines in lots of 250,000. However, this has since changed and there are now a variety of ways that the laptops are sold or distributed.
For example, from 12 November, members of the public can buy a machine for themselves as well as one for a child in a developing country.
The Give 1 Get 1 (G1G1) programme will initially distribute laptops to Cambodia, Afghanistan, Rwanda and Haiti.
Other schemes that have been reported include a deal with the government of Libya to provide a laptop for every child as well as deals with Peru and a sponsorship programme with Italy to provide 50,000 machines to Ethiopia.
Although various pilot projects had been announced in the past, such as the purchase of 20,000 laptops by Mongolia, there had not been official confirmation of any country that had signed up for the project.
Connected country
In July, hardware suppliers were told to ramp-up production of all of the components needed to build the low-cost machines.
The $100 has already been tested in many countries
Many believed that the decision meant that the organisation had met or surpassed the three million orders it need to make production viable.
However, the latest news suggests this was not the case.
The order for 100,000 machines was placed by the state-run Laboratorio Tecnológico del Uruguay (Latu) which runs a large scale education and communications project known as Ceibal.
The scheme will also provide connectivity to all of the schools involved.
Before placing the order, Latu had also evaluated the rival Intel Classmate PC.
Initially the XO laptops will be distributed in eight to nine of the country's 19 regions. A further 300,000 machines will provide machines for all of the country's children.
"We will also cover the rest of the country later in 2008 and Montevideo in 2009," said Miguel Brechner, president of the organisation.
'''OLPC XO-1 Mass Production has started'''
India is the latest of the countries where the One Laptop Per Child (OLPC) experiment has started. Children from the village of Khairat were given the opportunity to learn how to use the XO laptop. During the last year XO was distributed to children from Arahuay in Peru, Ban Samkha in Thailand, Cardal in Uruguay and Galadima in Nigeria. The OLPC team are, in their reports on the startup of the trials, delighted with how the laptop has improved access to information and ability to carry out educational activities. Thailand's ''The Nation'' has praised the project, describing the children as "enthusiastic" and keen to attend school with their laptops.

Recent good news for the project sees Uruguay having ordered 100,000 of the machines which are to be given to children aged six to twelve. Should all go according to plan a further 300,000 machines will be purchased by 2009 to give one to every child in the country. As the first to order, Uruguay chose the OLPC XO laptop over its rival from Intel, the Classmate PC. In parallel with the delivery of the laptops network connectivity will be provided to schools involved in the project.

'''The remainder of this article is based on Carla G. Munroy's ''Khairat Chronicle'', which is available from the OLPC Wiki. Additional sources are listed at the end.'''
OLPC in Galima (Nigeria) showing children with their lime green XO laptops.