Swansea Drydocks in Wales said it aims to create 85 jobs repairing, maintaining and breaking up ships.
The company said it will invest more than £4m in refurbishment, machinery and equipment, according to the BBC.
It said the move is to meet a growing demand in Europe for “environmentally responsible” ship recycling facilities.
Swansea Drydocks will apply to the Environment Agency for a permit to handle hazardous materials as part of the ship recycling process.
Operations are expected to begin this year.