Aquamarine Power will form a partnership with BAE Systems to research and develop the former's Oyster wave energy converter.
The device will pump high-pressure water onshore to drive a hydro-electric turbine that will generate electricity for the National Grid.
During the 30-month research programme, BAE will work with Aquamarine Power to develop an intelligent diagnostic system and remote ballasting mechanism.
The innovations will drive down maintenance costs and maximise energy production to roll out Oyster clean energy farms on a commercial scale around the world.
Aquamarine Power's Oyster technology will be installed at a depth of around 10m and 0.5km from shore.