President Alejandro Toledo of Peru has signed a law that redraws the sea border with Chile, deepening a row between the two Latin American nations.
The bill was passed unanimously
The bill, approved by Congress unanimously on Thursday, grants Peru 37,900 sq km (14,600 sq miles) of fishing waters in the Pacific Ocean.
Chile currently controls the area, and says the law violates treaties signed in the 1950s.
It has launched a diplomatic campaign against the move.
Members of Congress in Peru's capital, Lima, say the new law will lay the groundwork for the country to negotiate a new sea border.
"We are not seeking any sort of confrontation here, nor do we want to separate ourselves from the peaceful and respectful line of international law," Congressman Pedro Morales was quoted as saying by the AP news agency.
The legislation uses a technical formula established by the UN Convention on the Law of the Sea, Peruvian officials say.
The current border, set in the 1950s, is a horizontal line that starts close to the edge of the nations and cuts west across the Pacific.
Peru's proposed solution is a south-western sloping line that follows the two countries' diagonal border into the ocean.
Top Chilean officials have described the new law as illegal.
President Ricardo Lagos had earlier said Santiago "will continue to exercise full sovereignty" over the area.
Peru and Chile have a history of border disputes dating back to the 19th century.
Chile fought the War of the Pacific against Peru and Bolivia from 1879 to 1883, winning Bolivia's outlet to the sea and extensive areas from Peru.
In recent months, relations have deteriorated over allegations that Chile supplied arms to Ecuador during a 1995 war with Peru - claims that the Chilean government has denied.
In May, Peru suspended free-trade talks and confidence-building measures with Chile.
Peru also refused to support Chile to lead the Organisation of American States.