The government of Cyprus says it has begun preliminary construction work on a naval base in the west of the island.
Cyprus only has small maritime police force, and correspondents say the base is likely to be used by the Greek navy.
Earlier this year Cyprus completed an air base for use by Greek war planes.
The move was strongly criticised by Turkey.
The base was used during the joint military exercises Cyprus and Greece organised last week, and some Greek planes are still stationed there.
Relations between Turkey and the internationally-recognised Greek government of Cyprus have also been strained by the governments's decision to press ahead with the deployment of Russian missiles.
From the newsroom of the BBC World Service