diff --git a/CHANGELOG.rst b/CHANGELOG.rst
index d6725181ac05..489abfcbd1ad 100644
--- a/CHANGELOG.rst
+++ b/CHANGELOG.rst
@@ -7,6 +7,8 @@ the top.  Include a label indicating the component affected.
 
 Blades: Add possibility to use multiple LTI tools per page.
 
+Blades: LTI module can now load external content in a new window.
+
 LMS: Disable data download buttons on the instructor dashboard for large courses
 
 LMS: Ported bulk emailing to the beta instructor dashboard.
diff --git a/cms/static/sass/_mixins-inherited.scss b/cms/static/sass/_mixins-inherited.scss
new file mode 120000
index 000000000000..f64a7205612d
--- /dev/null
+++ b/cms/static/sass/_mixins-inherited.scss
@@ -0,0 +1 @@
+../../../common/static/sass/_mixins-inherited.scss
\ No newline at end of file
diff --git a/cms/static/sass/_variables.scss b/cms/static/sass/_variables.scss
index 3bd13f3e5b7f..093d3a957af5 100644
--- a/cms/static/sass/_variables.scss
+++ b/cms/static/sass/_variables.scss
@@ -197,6 +197,10 @@ $lightBluishGrey: rgb(197, 207, 223);
 $lightBluishGrey2: rgb(213, 220, 228);
 $error-red: rgb(253, 87, 87);
 
+
+//carryover from LMS for xmodules
+$sidebar-color: rgb(246, 246, 246);
+
 // type
 $sans-serif: $f-sans-serif;
 $body-line-height: golden-ratio(.875em, 1);
diff --git a/common/lib/xmodule/xmodule/css/lti/lti.scss b/common/lib/xmodule/xmodule/css/lti/lti.scss
index 97a8f62d5450..152963516c1d 100644
--- a/common/lib/xmodule/xmodule/css/lti/lti.scss
+++ b/common/lib/xmodule/xmodule/css/lti/lti.scss
@@ -2,8 +2,23 @@ div.lti {
     // align center
     margin: 0 auto;
 
-    h3.error_message {
-        display: block;
+    .wrapper-lti-link {
+        @include font-size(14);
+        position: relative;
+        background-color: $sidebar-color;
+        padding: ($baseline*1.8) ($baseline*1.5) ($baseline*1.1) $baseline;
+
+        .lti-link {
+            position: absolute;
+            top: ($baseline*1.8);
+            right: $baseline;
+
+            .link_lti_new_window {
+                @extend .gray-button;
+                @include font-size(13);
+                @include line-height(14);
+            }
+        }
     }
 
     form.ltiLaunchForm {
@@ -13,18 +28,8 @@ div.lti {
     iframe.ltiLaunchFrame {
         width: 100%;
         height: 800px;
-        display: none;
+        display: block;
         border: 0px;
         overflow-x: hidden;
     }
-
-    &.rendered {
-        iframe.ltiLaunchFrame {
-            display: block;
-        }
-
-        h3.error_message {
-            display: none;
-        }
-    }
 }
diff --git a/common/lib/xmodule/xmodule/js/fixtures/lti.html b/common/lib/xmodule/xmodule/js/fixtures/lti.html
index ae545970ce80..14bea7d7714d 100644
--- a/common/lib/xmodule/xmodule/js/fixtures/lti.html
+++ b/common/lib/xmodule/xmodule/js/fixtures/lti.html
@@ -1,36 +1,31 @@
-<div id="lti_id" class="lti">
+<div class="lti-wrapper">
+    <div id="lti_id" class="lti" data-open_in_a_new_page="true">
 
-    <form
-        action="http://www.example.com"
-        name="ltiLaunchForm"
-        class="ltiLaunchForm"
-        method="post"
-        target="ltiLaunchFrame"
-        enctype="application/x-www-form-urlencoded"
-    >
-        <input name="launch_presentation_return_url" value="" />
-        <input name="lti_version" value="LTI-1p0" />
-        <input name="user_id" value="student" />
-        <input name="oauth_nonce" value="28347958723982798572" />
-        <input name="oauth_timestamp" value="2389479832" />
-        <input name="oauth_consumer_key" value="" />
-        <input name="lis_result_sourcedid" value="" />
-        <input name="oauth_signature_method" value="HMAC-SHA1" />
-        <input name="oauth_version" value="1.0" />
-        <input name="role" value="student" />
-        <input name="lis_outcome_service_url" value="" />
-        <input name="oauth_signature" value="89ru3289r3ry283y3r82ryr38yr" />
-        <input name="lti_message_type" value="basic-lti-launch-request" />
-        <input name="oauth_callback" value="about:blank" />
+        <form
+            action=""
+            name="ltiLaunchForm"
+            class="ltiLaunchForm"
+            method="post"
+            target="_blank"
+            enctype="application/x-www-form-urlencoded"
+        >
+            <input name="launch_presentation_return_url" value="" />
+            <input name="lti_version" value="LTI-1p0" />
+            <input name="user_id" value="student" />
+            <input name="oauth_nonce" value="28347958723982798572" />
+            <input name="oauth_timestamp" value="2389479832" />
+            <input name="oauth_consumer_key" value="" />
+            <input name="lis_result_sourcedid" value="" />
+            <input name="oauth_signature_method" value="HMAC-SHA1" />
+            <input name="oauth_version" value="1.0" />
+            <input name="role" value="student" />
+            <input name="lis_outcome_service_url" value="" />
+            <input name="oauth_signature" value="89ru3289r3ry283y3r82ryr38yr" />
+            <input name="lti_message_type" value="basic-lti-launch-request" />
+            <input name="oauth_callback" value="about:blank" />
 
-        <input type="submit" value="Press to Launch" />
-    </form>
-
-    <h3 class="error_message">
-        Please provide launch_url. Click "Edit", and fill in the
-        required fields.
-    </h3>
-
-    <iframe name="ltiLaunchFrame" class="ltiLaunchFrame" src=""></iframe>
+            <input type="submit" value="Press to Launch" />
+        </form>
 
+    </div>
 </div>
diff --git a/common/lib/xmodule/xmodule/js/spec/lti/constructor.js b/common/lib/xmodule/xmodule/js/spec/lti/constructor.js
index f016d42d9d70..cda1d7988d7f 100644
--- a/common/lib/xmodule/xmodule/js/spec/lti/constructor.js
+++ b/common/lib/xmodule/xmodule/js/spec/lti/constructor.js
@@ -5,77 +5,158 @@
  *
  *
  * The front-end part of the LTI module is really simple. If an action
- * is set for the hidden LTI form, then it is submited, and the results are
- * redirected to an iframe.
+ * is set for the hidden LTI form, then it is submitted, and the results are
+ * redirected to an iframe or to a new window (based on the
+ * "open_in_a_new_page" attribute).
  *
- * We will test that the form is only submited when the action is set (i.e.
- * not empty).
+ * We will test that the form is only submitted when the action is set (i.e.
+ * not empty, and not the default one).
  *
  * Other aspects of LTI module will be covered by Python unit tests and
  * acceptance tests.
- *
  */
 
 /*
- * "Hence that general is skilful in attack whose opponent does not know what
- * to defend; and he is skilful in defense whose opponent does not know what
+ * "Hence that general is skillful in attack whose opponent does not know what
+ * to defend; and he is skillful in defense whose opponent does not know what
  * to attack."
  *
  * ~ Sun Tzu
  */
 
 (function () {
+    var element, container, form, link,
+        IN_NEW_WINDOW = 'true',
+        IN_IFRAME = 'false',
+        EMPTY_URL = '',
+        DEFAULT_URL = 'http://www.example.com',
+        NEW_URL = 'http://www.example.com/some_book';
+
+    function initialize(target, action) {
+        var tempEl;
+
+        loadFixtures('lti.html');
+
+        element = $('.lti-wrapper');
+        container = element.find('.lti');
+        form = container.find('.ltiLaunchForm');
+
+        if (target === IN_IFRAME) {
+            container.data('open_in_a_new_page', 'false');
+            form.attr('target', 'ltiLaunchFrame');
+        }
+
+        form.attr('action', action);
+
+        // If we have a new proper action (non-default), we create either
+        // a link that will submit the form, or an iframe that will contain
+        // the answer of auto submitted form.
+        if (action !== EMPTY_URL && action !== DEFAULT_URL) {
+            if (target === IN_NEW_WINDOW) {
+                $('<a />', {
+                    href: '#',
+                    class: 'link_lti_new_window'
+                }).appendTo(container);
+
+                link = container.find('.link_lti_new_window');
+            } else {
+                $('<iframe />', {
+                    name: 'ltiLaunchFrame',
+                    class: 'ltiLaunchFrame',
+                    src: ''
+                }).appendTo(container);
+            }
+        }
+
+        spyOnEvent(form, 'submit');
+
+        LTI(element);
+    }
+
     describe('LTI', function () {
-        describe('constructor', function () {
-            describe('before settings were filled in', function () {
-                var element, errorMessage, frame;
+        describe('initialize', function () {
+            describe(
+                'open_in_a_new_page is "true", launch URL is empty',
+                function () {
 
-                // This function will be executed before each of the it() specs
-                // in this suite.
                 beforeEach(function () {
-                    loadFixtures('lti.html');
+                    initialize(IN_NEW_WINDOW, EMPTY_URL);
+                });
+
+                it('form is not submitted', function () {
+                    expect('submit').not.toHaveBeenTriggeredOn(form);
+                });
+            });
 
-                    element = $('#lti_id');
-                    errorMessage = element.find('.error_message');
-                    form = element.find('.ltiLaunchForm');
-                    frame = element.find('.ltiLaunchFrame');
+            describe(
+                'open_in_a_new_page is "true", launch URL is default',
+                function () {
 
-                    spyOnEvent(form, 'submit');
+                beforeEach(function () {
+                    initialize(IN_NEW_WINDOW, DEFAULT_URL);
+                });
 
-                    LTI(element);
+                it('form is not submitted', function () {
+                    expect('submit').not.toHaveBeenTriggeredOn(form);
                 });
+            });
 
-                it(
-                    'when URL setting is not filled form is not submited',
-                    function () {
+            describe(
+                'open_in_a_new_page is "true", launch URL is not empty, and ' +
+                'not default',
+                function () {
 
+                beforeEach(function () {
+                    initialize(IN_NEW_WINDOW, NEW_URL);
+                });
+
+                it('form is not submitted', function () {
                     expect('submit').not.toHaveBeenTriggeredOn(form);
                 });
+
+                it('after link is clicked, form is submitted', function () {
+                    link.trigger('click');
+
+                    expect('submit').toHaveBeenTriggeredOn(form);
+                });
             });
 
-            describe('After the settings were filled in', function () {
-                var element, errorMessage, frame;
+            describe(
+                'open_in_a_new_page is "false", launch URL is empty',
+                function () {
 
-                // This function will be executed before each of the it() specs
-                // in this suite.
                 beforeEach(function () {
-                    loadFixtures('lti.html');
+                    initialize(IN_IFRAME, EMPTY_URL);
+                });
 
-                    element = $('#lti_id');
-                    errorMessage = element.find('.error_message');
-                    form = element.find('.ltiLaunchForm');
-                    frame = element.find('.ltiLaunchFrame');
+                it('form is not submitted', function () {
+                    expect('submit').not.toHaveBeenTriggeredOn(form);
+                });
+            });
 
-                    spyOnEvent(form, 'submit');
+            describe(
+                'open_in_a_new_page is "false", launch URL is default',
+                function () {
 
-                    // The user "fills in" the necessary settings, and the
-                    // form will get an action URL.
-                    form.attr('action', 'http://www.example.com/test_submit');
+                beforeEach(function () {
+                    initialize(IN_IFRAME, DEFAULT_URL);
+                });
 
-                    LTI(element);
+                it('form is not submitted', function () {
+                    expect('submit').not.toHaveBeenTriggeredOn(form);
+                });
+            });
+
+            describe(
+                'open_in_a_new_page is "false", launch URL is not empty, ' +
+                'and not default',
+                function () {
+
+                beforeEach(function () {
+                    initialize(IN_IFRAME, NEW_URL);
                 });
 
-                it('when URL setting is filled form is submited', function () {
+                it('form is submitted', function () {
                     expect('submit').toHaveBeenTriggeredOn(form);
                 });
             });
diff --git a/common/lib/xmodule/xmodule/js/src/lti/lti.js b/common/lib/xmodule/xmodule/js/src/lti/lti.js
index 7d5b183f216b..9454b0c34676 100644
--- a/common/lib/xmodule/xmodule/js/src/lti/lti.js
+++ b/common/lib/xmodule/xmodule/js/src/lti/lti.js
@@ -1,9 +1,43 @@
+/**
+ * File: lti.js
+ *
+ * Purpose: LTI module constructor. Given an LTI element, we process it.
+ *
+ *
+ * Inside the element there is a form. If that form has a valid action
+ * attribute, then we do one of:
+ *
+ *     1.) Submit the form. The results will be shown on the current page in an
+ *         iframe.
+ *     2.) Attach a handler function to a link which will submit the form. The
+ *         results will be shown in a new window.
+ *
+ * The 'open_in_a_new_page' data attribute of the LTI element dictates which of
+ * the two actions will be performed.
+ */
+
+/*
+ * So the thing to do when working on a motorcycle, as in any other task, is to
+ * cultivate the peace of mind which does not separate one's self from one's
+ * surroundings. When that is done successfully, then everything else follows
+ * naturally. Peace of mind produces right values, right values produce right
+ * thoughts. Right thoughts produce right actions and right actions produce
+ * work which will be a material reflection for others to see of the serenity
+ * at the center of it all.
+ *
+ * ~ Robert M. Pirsig
+ */
+
 window.LTI = (function () {
     // Function initialize(element)
     //
-    // Initialize the LTI iframe.
+    // Initialize the LTI module.
+    //
+    // @param element    DOM element, or jQuery element object.
+    //
+    // @return    undefined
     function initialize(element) {
-        var form;
+        var form, openInANewPage, formAction;
 
         // In cms (Studio) the element is already a jQuery object. In lms it is
         // a DOM object.
@@ -13,12 +47,36 @@ window.LTI = (function () {
         element = $(element);
 
         form = element.find('.ltiLaunchForm');
+        formAction = form.attr('action');
+
+        // If action is empty string, or action is the default URL that should
+        // not cause a form submit.
+        if (!formAction || formAction === 'http://www.example.com') {
+
+            // Nothing to do - no valid action provided. Error message will be
+            // displaced in browser (HTML).
+            return;
+        }
+
+        // We want a Boolean 'true' or 'false'. First we will retrieve the data
+        // attribute, and then we will parse it via native JSON.parse().
+        openInANewPage = element.find('.lti').data('open_in_a_new_page');
+        openInANewPage = JSON.parse(openInANewPage);
 
         // If the Form's action attribute is set (i.e. we can perform a normal
-        // submit), then we submit the form and make the frame shown.
-        if (form.attr('action') && form.attr('action') !== 'http://www.example.com') {
+        // submit), then we (depending on instance settings) submit the form
+        // when user will click on a link, or submit the form immediately.
+        if (openInANewPage === true) {
+            element.find('.link_lti_new_window').on('click', function () {
+                form.submit();
+            });
+        } else {
+            // At this stage the form exists on the page and has a valid
+            // action. We are safe to submit it, even if `openInANewPage` is
+            // set to some weird value.
+            //
+            // Best case scenario is that `openInANewPage` is set to `true`.
             form.submit();
-            element.find('.lti').addClass('rendered');
         }
     }
 
diff --git a/common/lib/xmodule/xmodule/lti_module.py b/common/lib/xmodule/xmodule/lti_module.py
index bbc39957a078..6c442ae7258c 100644
--- a/common/lib/xmodule/xmodule/lti_module.py
+++ b/common/lib/xmodule/xmodule/lti_module.py
@@ -8,12 +8,14 @@
 import logging
 import oauthlib.oauth1
 import urllib
+import json
 
 from xmodule.editing_module import MetadataOnlyEditingDescriptor
 from xmodule.x_module import XModule
 from xmodule.course_module import CourseDescriptor
 from pkg_resources import resource_string
 from xblock.core import String, Scope, List
+from xblock.fields import Boolean
 
 log = logging.getLogger(__name__)
 
@@ -45,6 +47,7 @@ class LTIFields(object):
     lti_id = String(help="Id of the tool", default='', scope=Scope.settings)
     launch_url = String(help="URL of the tool", default='http://www.example.com', scope=Scope.settings)
     custom_parameters = List(help="Custom parameters (vbid, book_location, etc..)", scope=Scope.settings)
+    open_in_a_new_page = Boolean(help="Should LTI be opened in new page?", default=True, scope=Scope.settings)
 
 
 class LTIModule(LTIFields, XModule):
@@ -169,14 +172,15 @@ def get_html(self):
             client_key,
             client_secret
         )
-
         context = {
             'input_fields': input_fields,
 
             # these params do not participate in oauth signing
             'launch_url': self.launch_url,
             'element_id': self.location.html_id(),
-            'element_class': self.location.category,
+            'element_class': self.category,
+            'open_in_a_new_page': self.open_in_a_new_page,
+            'display_name': self.display_name,
         }
 
         return self.system.render_template('lti.html', context)
diff --git a/lms/djangoapps/courseware/features/lti.feature b/lms/djangoapps/courseware/features/lti.feature
index a7182a3daeea..8255e515b077 100644
--- a/lms/djangoapps/courseware/features/lti.feature
+++ b/lms/djangoapps/courseware/features/lti.feature
@@ -2,17 +2,27 @@
 Feature: LMS.LTI component
   As a student, I want to view LTI component in LMS.
 
-  Scenario: LTI component in LMS is not rendered
+  Scenario: LTI component in LMS with no launch_url is not rendered
   Given the course has correct LTI credentials
-  And the course has an LTI component with incorrect fields
-  Then I view the LTI and it is not rendered
+  And the course has an LTI component with no_launch_url fields, new_page is false
+  Then I view the LTI and error is shown
 
-  Scenario: LTI component in LMS is rendered
+  Scenario: LTI component in LMS with incorrect lti_id is rendered incorrectly
   Given the course has correct LTI credentials
-  And the course has an LTI component filled with correct fields
-  Then I view the LTI and it is rendered
+  And the course has an LTI component with incorrect_lti_id fields, new_page is false
+  Then I view the LTI but incorrect_signature warning is rendered
 
   Scenario: LTI component in LMS is rendered incorrectly
   Given the course has incorrect LTI credentials
-  And the course has an LTI component filled with correct fields
+  And the course has an LTI component with correct fields, new_page is false
   Then I view the LTI but incorrect_signature warning is rendered
+
+  Scenario: LTI component in LMS is correctly rendered in new page
+  Given the course has correct LTI credentials
+  And the course has an LTI component with correct fields, new_page is true
+  Then I view the LTI and it is rendered in new page
+
+  Scenario: LTI component in LMS is correctly rendered in iframe
+  Given the course has correct LTI credentials
+  And the course has an LTI component with correct fields, new_page is false
+  Then I view the LTI and it is rendered in iframe
diff --git a/lms/djangoapps/courseware/features/lti.py b/lms/djangoapps/courseware/features/lti.py
index fa76dbb4f620..58de82ded630 100644
--- a/lms/djangoapps/courseware/features/lti.py
+++ b/lms/djangoapps/courseware/features/lti.py
@@ -1,5 +1,6 @@
 #pylint: disable=C0111
 
+import os
 from django.contrib.auth.models import User
 from lettuce import world, step
 from lettuce.django import django_url
@@ -8,33 +9,19 @@
 from student.models import CourseEnrollment
 
 
-@step('I view the LTI and it is not rendered$')
+@step('I view the LTI and error is shown$')
 def lti_is_not_rendered(_step):
-    # lti div has no class rendered
-    assert world.is_css_not_present('div.lti.rendered')
-
     # error is shown
-    assert world.css_visible('.error_message')
+    assert world.is_css_present('.error_message')
 
-    # iframe is not visible
-    assert not world.css_visible('iframe')
+    # iframe is not presented
+    assert not world.is_css_present('iframe')
 
-    location = world.scenario_dict['LTI'].location.html_id()
-    iframe_name = 'ltiLaunchFrame-' + location
-
-    #inside iframe test content is not presented
-    with world.browser.get_iframe(iframe_name) as iframe:
-        # iframe does not contain functions from terrain/ui_helpers.py
-        world.browser.driver.implicitly_wait(1)
-        try:
-            assert iframe.is_element_not_present_by_css('.result', wait_time=1)
-        except:
-            raise
-        finally:
-            world.browser.driver.implicitly_wait(world.IMPLICIT_WAIT)
+    # link is not presented
+    assert not world.is_css_present('.link_lti_new_window')
 
 
-def check_lti_ifarme_content(text):
+def check_lti_iframe_content(text):
     #inside iframe test content is presented
     location = world.scenario_dict['LTI'].location.html_id()
     iframe_name = 'ltiLaunchFrame-' + location
@@ -47,30 +34,33 @@ def check_lti_ifarme_content(text):
         ))
 
 
-@step('I view the LTI and it is rendered$')
-def lti_is_rendered(_step):
-    # lti div has class rendered
-    assert world.is_css_present('div.lti.rendered')
+@step('I view the LTI and it is rendered in (.*)$')
+def lti_is_rendered(_step, rendered_in):
+    if rendered_in.strip() == 'iframe':
+        assert world.is_css_present('iframe')
+        assert not world.is_css_present('.link_lti_new_window')
+        assert not world.is_css_present('.error_message')
 
-    # error is hidden
-    assert not world.css_visible('.error_message')
+        # iframe is visible
+        assert world.css_visible('iframe')
+        check_lti_iframe_content("This is LTI tool. Success.")
 
-    # iframe is visible
-    assert world.css_visible('iframe')
-    check_lti_ifarme_content("This is LTI tool. Success.")
+    elif rendered_in.strip() == 'new page':
+        assert not world.is_css_present('iframe')
+        assert world.is_css_present('.link_lti_new_window')
+        assert not world.is_css_present('.error_message')
+        check_lti_popup()
+    else:  # incorrent rendered_in parameter
+        assert False
 
 
 @step('I view the LTI but incorrect_signature warning is rendered$')
 def incorrect_lti_is_rendered(_step):
-    # lti div has class rendered
-    assert world.is_css_present('div.lti.rendered')
-
-    # error is hidden
-    assert not world.css_visible('.error_message')
-
-    # iframe is visible
-    assert world.css_visible('iframe')
-    check_lti_ifarme_content("Wrong LTI signature")
+    assert world.is_css_present('iframe')
+    assert not world.is_css_present('.link_lti_new_window')
+    assert not world.is_css_present('.error_message')
+    #inside iframe test content is presented
+    check_lti_iframe_content("Wrong LTI signature")
 
 
 @step('the course has correct LTI credentials$')
@@ -97,44 +87,33 @@ def set_incorrect_lti_passport(_step):
     i_am_registered_for_the_course(coursenum, metadata)
 
 
-@step('the course has an LTI component filled with correct fields$')
-def add_correct_lti_to_course(_step):
+@step('the course has an LTI component with (.*) fields, new_page is(.*)$')
+def add_correct_lti_to_course(_step, fields, new_page):
     category = 'lti'
-    world.scenario_dict['LTI'] = world.ItemFactory.create(
-        # parent_location=section_location(course),
-        parent_location=world.scenario_dict['SEQUENTIAL'].location,
-        category=category,
-        display_name='LTI',
-        metadata={
-            'lti_id': 'correct_lti_id',
-            'launch_url': world.lti_server.oauth_settings['lti_base'] + world.lti_server.oauth_settings['lti_endpoint']
-        }
-    )
-    course = world.scenario_dict["COURSE"]
-    chapter_name = world.scenario_dict['SECTION'].display_name.replace(
-        " ", "_")
-    section_name = chapter_name
-    path = "/courses/{org}/{num}/{name}/courseware/{chapter}/{section}".format(
-        org=course.org,
-        num=course.number,
-        name=course.display_name.replace(' ', '_'),
-        chapter=chapter_name,
-        section=section_name)
-    url = django_url(path)
-
-    world.browser.visit(url)
-
+    lti_id = 'correct_lti_id'
+    launch_url = world.lti_server.oauth_settings['lti_base'] + world.lti_server.oauth_settings['lti_endpoint']
+    if fields.strip() == 'incorrect_lti_id':  # incorrect fields
+        lti_id = 'incorrect_lti_id'
+    elif fields.strip() == 'correct':  # correct fields
+        pass
+    elif fields.strip() == 'no_launch_url':
+        launch_url = u''
+    else:  # incorrect parameter
+        assert False
+
+    if new_page.strip().lower() == 'false':
+        new_page = False
+    else:  # default is True
+        new_page = True
 
-@step('the course has an LTI component with incorrect fields$')
-def add_incorrect_lti_to_course(_step):
-    category = 'lti'
     world.scenario_dict['LTI'] = world.ItemFactory.create(
         parent_location=world.scenario_dict['SEQUENTIAL'].location,
         category=category,
         display_name='LTI',
         metadata={
-            'lti_id': 'incorrect_lti_id',
-            'lti_url': world.lti_server.oauth_settings['lti_base'] + world.lti_server.oauth_settings['lti_endpoint']
+            'lti_id': lti_id,
+            'launch_url': launch_url,
+            'open_in_a_new_page': new_page
         }
     )
     course = world.scenario_dict["COURSE"]
@@ -192,3 +171,28 @@ def i_am_registered_for_the_course(course, metadata):
     CourseEnrollment.enroll(usr, course_id(course))
 
     world.log_in(username='robot', password='test')
+
+
+def check_lti_popup():
+    parent_window = world.browser.current_window # Save the parent window
+    world.css_find('.link_lti_new_window').first.click()
+
+    assert len(world.browser.windows) != 1
+
+    for window in world.browser.windows:
+        world.browser.switch_to_window(window) # Switch to a different window (the pop-up)
+        # Check if this is the one we want by comparing the url
+        url = world.browser.url
+        basename = os.path.basename(url)
+        pathname = os.path.splitext(basename)[0]
+
+        if pathname == u'correct_lti_endpoint':
+            break
+
+    result = world.css_find('.result').first.text
+    assert result == u'This is LTI tool. Success.'
+
+    world.browser.driver.close() # Close the pop-up window
+    world.browser.switch_to_window(parent_window) # Switch to the main window again
+
+
diff --git a/lms/djangoapps/courseware/tests/test_lti.py b/lms/djangoapps/courseware/tests/test_lti.py
index 1996f95cbff4..a176384fd12a 100644
--- a/lms/djangoapps/courseware/tests/test_lti.py
+++ b/lms/djangoapps/courseware/tests/test_lti.py
@@ -72,9 +72,11 @@ def test_lti_constructor(self):
         generated_context = self.item_module.render('student_view').content
         expected_context = {
             'input_fields': self.correct_headers,
+            'display_name': self.item_module.display_name,
             'element_class': self.item_module.location.category,
             'element_id': self.item_module.location.html_id(),
             'launch_url': 'http://www.example.com',  # default value
+            'open_in_a_new_page': True,
         }
         self.assertEqual(
             generated_context,
diff --git a/lms/templates/lti.html b/lms/templates/lti.html
index 5e1b9e5d772b..7e6a3eac404f 100644
--- a/lms/templates/lti.html
+++ b/lms/templates/lti.html
@@ -1,14 +1,24 @@
-<div id="${element_id}" class="${element_class}">
+<%! import json %>
+<%! from django.utils.translation import ugettext as _ %>
 
-    ## This form will be hidden. Once available on the client, the LTI
-    ## module JavaScript will trigget a "submit" on the form, and the
+<div
+    id="${element_id}"
+    class="${element_class}"
+    data-open_in_a_new_page="${json.dumps(open_in_a_new_page)}"
+>
+
+    ## This form will be hidden.
+    ## If open_in_a_new_page is false then, once available on the client, the
+    ## LTI module JavaScript will trigger a "submit" on the form, and the
     ## result will be rendered to the below iFrame.
+    ## If open_in_a_new_page is true, then link will be shown, and by clicking
+    ## on it, LTI will pop up in new window.
     <form
         action="${launch_url}"
         name="ltiLaunchForm-${element_id}"
         class="ltiLaunchForm"
         method="post"
-        target="ltiLaunchFrame-${element_id}"
+        target=${"_blank" if open_in_a_new_page else "ltiLaunchFrame-{0}".format(element_id)}
         encType="application/x-www-form-urlencoded"
     >
 
@@ -19,16 +29,29 @@
         <input type="submit" value="Press to Launch" />
     </form>
 
+
+% if launch_url and launch_url !=  'http://www.example.com':
+    % if open_in_a_new_page:
+        <div class="wrapper-lti-link">
+            <h3 class="title">
+                ${display_name} (${_('External resource')})
+            </h3>
+            <p class="lti-link external"><a href="#" class='link_lti_new_window'>
+                ${_('View resource in a new window')}
+                 <i class="icon-external-link"></i>
+            </a></p>
+        </div>
+    % else:
+        ## The result of the form submit will be rendered here.
+        <iframe
+            name="ltiLaunchFrame-${element_id}"
+            class="ltiLaunchFrame"
+            src=""
+        ></iframe>
+    % endif
+% else:
     <h3 class="error_message">
-        Please provide launch_url. Click "Edit", and fill in the
-        required fields.
+        ${_('Please provide launch_url. Click "Edit", and fill in the required fields.')}
     </h3>
-
-    ## The result of the form submit will be rendered here.
-    <iframe
-        name="ltiLaunchFrame-${element_id}"
-        class="ltiLaunchFrame"
-        src=""
-    ></iframe>
-
+%endif
 </div>