Wave Hub is due to start in 2011
Wave energy researchers in Devon and Cornwall have been given a £10m cash injection from the government.
The money will allow the Peninsula Research Institute for Marine Renewable Energy (PRIMaRE) at Plymouth and Exeter Universities to take on more staff.
Experts say it could make the area a global leader in wave energy research.
PRIMaRE already has 15 academics and 60 researchers working on projects like the Wave Hub, a seabed socket to link wave machines to the National Grid.
We are at the cutting edge of a major world development
The £28m Wave Hub, off Newquay in Cornwall, is due to start operating in 2011.
Professor Martin Attrill, director of the Marine Institute at the University of Plymouth, told BBC News: "We should be really proud that we are going to have this world-leading facility which could put the South West at the centre of the renewable energy map."
The University of Plymouth was already building new "world-class facilities" to attract wave energy developers who want to test their ideas.
A new £1m wave modelling basin would allow researchers to create waves and currents to test models.
University of Exeter researchers launch a wave energy buoy
Prof Attrill said: "The long-term hope of this extra investment is to create a centre of expertise so that the South West is known as the place to come for developing these green technologies.
"The Wave Hub is just the start. We want to look at all different aspects of producing renewable energy."
The bulk of the new investment, £5.3m, has come from the EU, including the European Regional Development Fund and Convergence.
The South West Regional Development Agency (RDA) is contributing £4.3m, with a further £200,000 from the University of Plymouth and £466,000 from the University of Exeter.
Prof Attrill said: "We have to look at what damage will be caused to our environment by climate change and that means moving towards these renewable, sustainable sources of energy.
"We could be world leaders in this region, not just in energy generation, but also in ways to conserve energy.
"I think this is the future and for once we are at the cutting edge of a major world development which is going to be huge over the next 10 or 20 years."