An ion projection lithography (IPL) technique called maskless micro-ion-beam reduction lithography (MMRL) is being studied for future dynamic random access memory and microprocessors manufacturing. In addition to minimum feature sizes of 50 nm or less required of next generation lithography, this MMRL system is proposed to completely eliminate the first stage of the conventional IPL system that contains the complicated beam optics design in front of the stencil mask and the mask itself. Its main components consist of a multi-cusp, rf plasma generator, a multi-beamlet extraction system, and an accelerator column for beam reduction. The viability of this MMRL system hinges upon the successful development of these components, most importantly the proposed all-electrostatic accelerator column. This article describes the different components of the MMRL system and its ion optics. Computational results of beam demagnification and optics optimization are also presented along with design progress of the prototype MMRL system.