The Minister for the Marine, Mr Fahey, has awarded the contract for the design of a £14.8 million development at Rossaveel harbour, Co Galway.
The bulk of the funding will be spent on a deepwater berth and breakwater and will be supported by the Government's National Development Plan. It is one of a series of harbours in 10 counties which are to be improved under the NDP, including Killybegs, Co Donegal, and Castletownbere, Co Cork.
The first phase of the upgrade in the Minister's Galway West constituency is expected to start early next year.
SIPTU's oil and gas offshore committee has welcomed the development which, it says, will act as a further impetus towards provision of a "much-needed deep-water harbour for the west of Ireland".
Mr Padraig Campbell, spokesman for the committee, said the union had been pushing for this for a number of years, and its president, Mr Des Geraghty, had visited the area and had emphasised the massive spin-off for the local community.
Mr Campbell said Rossaveel was ideally suited, both geographically and logistically, for west coast offshore oil and gas work. It was one of the State's designated fishery harbours but was also an active inshore ferry port. Such a base would provide 12 shore jobs to every one offshore.
He said the harbour was close to airports, city services and there was potential for expansion of a resource-based industry on the surrounding large land banks.
"Much of this work is at present sourced out of Ireland, with ports such as Ayr in Scotland benefiting from work in Irish waters," said Mr Campbell.
Mott MacDonald, EPO Ltd, consulting engineers, have been awarded the contract for the planning application and design stages of the harbour development. Work is due to begin immediately and the planning application will be lodged this year, according to Mr Fahey.
The first phase is expected to begin early next year. It will involve dredging of the harbour and navigation channel, along with construction of a dedicated ferry berth for vessels operating between Rossaveel and the Aran Islands. The deepwater berth and breakwater will be built during the second phase.