Cell wall formation. Synthesis of cross-linked peptidoglycan from the lipid intermediates. The enzyme has a penicillin-insensitive transglycosylase N-terminal domain (formation of linear glycan strands) and a penicillin-sensitive transpeptidase C-terminal domain (cross-linking of the peptide subunits) (By similarity). [GlcNAc-(1->4)-Mur2Ac(oyl-L-Ala-gamma-D-Glu-L-Lys-D-Ala-D-Ala)](n)-di-trans,octa-cis-undecaprenyl diphosphate + beta-D-GlcNAc-(1->4)-Mur2Ac(oyl-L-Ala-gamma-D-Glu-L-Lys-D-Ala-D-Ala)-di-trans,octa-cis-undecaprenyl diphosphate = [GlcNAc-(1->4)-Mur2Ac(oyl-L-Ala-gamma-D-Glu-L-Lys-D-Ala-D-Ala)](n+1)-di-trans-octa-cis-undecaprenyl diphosphate + di-trans,octa-cis-undecaprenyl diphosphate + H(+) Preferential cleavage: (Ac)2-L-Lys-D-Ala-|-D-Ala. Also transpeptidation of peptidyl-alanyl moieties that are N-acyl substituents of D-alanine. Cell wall biogenesis; peptidoglycan biosynthesis. In the N-terminal section; belongs to the glycosyltransferase 51 family. In the C-terminal section; belongs to the transpeptidase family.