Introducing an intelligent augmented reality based M-learning application designed and developed for improving engineering students' English language skills, this chapter reports a work-in-progress that focuses on system design procedure. The application consists of Artificial Intelligence (AI) based functions to ensure an effective learning flow while taking advantages of game-based learning by providing a story board structure with a content tree. Four design principles "fair use, flexible use, fault tolerance, educational climate" by Elias in addition to Stockwell and Hubbard's principles for mobile supported language learning have been taken into account. Furthermore, the proposed system here employs an effective approach combining both real and virtual environments to achieve an Augmented Reality based learning experiences for students. After the introduction of the application, the chapter outlines how it will be processed in the future.