Involved in the biosynthesis of the antibiotic D-cycloserine (DCS), a cyclic structural analog of D-alanine, used as an antitubercular agent. Catalyzes the synthesis of D-cycloserine from O-ureido-D-serine. It reacts exclusively with O-ureido-D-serine. ATP + H(+) + H2O + O-ureido-D-serine = ADP + CO2 + D-cycloserine + NH4(+) + phosphate Binds 1 Mg(2+) or Mn(2+) ion per subunit. Monomer. Cells lacking this gene do not produce cycloserine (DCS).