Hundreds of residents of the Bakassi peninsula say they have declared independence, days before Nigeria is to start transferring control to Cameroon.
Most Bakassi residents are fishermen
The Bakassi Movement for Self Determination would reject Cameroonian sovereignty, the residents said.
They have also refused a Nigerian government offer to relocate them elsewhere in Nigeria.
Nigerian forces are due to start leaving the region this week, after the government agreed to the handover.
"The people have declared their own republic, known as the Democratic Republic of Bakassi. We will no longer have anything to do with Nigeria, since Nigeria does not want anything to do with us," said Tony Ene, the interim head of the movement.
The AP news agency reports that supporters waved new blue and white Bakassi flags, while Nigerian soldiers watched.
In June, Nigeria's President Olusegun Obasanjo said he would abide by a 2002 World Court ruling to transfer the potentially oil-rich Bakassi peninsula to Cameroon.
Mr Obasanjo has tried to reassure Bakassi residents that their safety would be guaranteed even when Nigerian troops leave.
The territorial dispute sparked military clashes between Nigeria and Cameroon during the 1990s.
Most of those who live in Bakassi are Nigerians and are strongly opposed to coming under Cameroonian jurisdiction.
A special transitional arrangement will be in place for five years.
Cameroon has pledged to respect the culture, language, beliefs, property and fishing rights of the peninsula's people, and not to impose "discriminatory" taxes.
Bakassi juts into the Gulf of Guinea, an area which may contain up to 10% of the world's oil and gas reserves.
It is also rich in fish.
The 2002 International Court of Justice ruling was based on a 1913 treaty between the former colonial powers, Britain and Germany.
The agreement also settles the border between Nigeria and Cameroon for 1,690km (1,056 miles) up to Lake Chad.
Some villages further north have already been exchanged.