Voith Hydro and RWE Innogy will jointly install a 1MW marine tidal current turbine off the Scottish coast as part of a trial operation.
The turbine will start its two-year trial operation in the European Marine Energy Centre (EMEC) in the Orkney Island waters in 2011.
Once installed, the turbine will feed about 1,800MWh of electricity into the grid per year, according to RWE.
The turbine will be developed by Voith Hydro and RWE Innogy's joint venture, Voith Hydro Ocean Current Technologies.
Bauer Renewables is then scheduled to build and install the turbine foundation by the end of the year.
RWE Innogy CEO Fritz Vahrenholt said that they are testing a marine tidal current prototype for the first time on an industrial scale off the Scottish coast.
"The experience gathered here in terms of technology and economic efficiency will provide us with important information for our future growth in this sector," Vahrenholt said.
Based on successful tests, RWE said it plans to build more marine tidal current power plants with an installed capacity of up to 100MW by 2020, primarily off British coastlines.