The Newhaven Flood Alleviation Scheme aims to reduce the flood risk to around 431 homes and 387 commercial properties by upgrading tidal defences in the East Sussex town.
Construction work began on 03 January after two years of development, including consultation with the local community.
In addition, the scheme has been developed in partnership with Lewes District Council, East Sussex County Council, the Coast to Capital Local Enterprise Partnership (LEP) and South East LEP.
The Coast to Capital LEP and South East LEP are each contributing £1.5m, as part of the wider commitment to regeneration in Newhaven.
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Floods Minister Thérèse Coffey said: "This £18 million flood defence scheme is a great example of our commitment to better protect the Sussex coast from the kind of devastating flooding experienced in 2013.
"All along this coastline, communities are thriving and growing. But we understand the region's full potential cannot be realised without tackling flood risk. That's exactly what we're working with our partners to achieve in Newhaven and throughout the country."
Gordon Wilson, Environment Agency Area Flood and Coastal Risk Manager, added: "I am delighted that construction has started and I would like to take the opportunity to thank the Newhaven community for their invaluable feedback and support throughout the design, consultation and planning processes.
"In order to improve the current aging flood defences, unavoidably there may be some disruption whilst essential construction work takes place. We always aim to keep any disruption to a minimum and we thank the community in advance for their ongoing support.
"When the whole project is complete in 2019, the scheme will reduce the tidal flood risk to hundreds of homes and a significant number of commercial properties in the area, as well as protecting important local infrastructure such as the road network, railway tracks and the train station. This scheme will also support the wider regeneration of Newhaven, helping to bring new investment, jobs and homes to the area."
(LM)
