The £9.5 million facility at Edinburgh University will be able to simulate conditions of coastlines around Europe.
A pool will mimic waves of up to 28m and currents reaching 12 knots, conditions said to be currently unavailable to developers and engineers.
The project is being managed by FloWave TT, a not-for-profit subsidiary of the university.
The All-Waters Combined Current and Wave Test Facility will be built at King’s Buildings and is due to open in mid-2013.
The facility is being funded by the Engineering and Physical Sciences Research Council (EPSRC) and the university.
EPSRC chief executive Dave Delpy said: “I am confident that this investment will provide a world-class facility that will bring benefit to UK science and help push forward renewable energy technologies.”