CONSTRUCTION work has started on a £2.5 million development at Chickerell Army Camp near Weymouth.
The Ministry of Defence has invested in a building to house a new kitchen and canteen and an armoury as part of the major scheme.
Both buildings are due to be completed by May 2006.
The project is being run by Southampton-based company Dyer and Butler.
Company marketing manager Richard White said: "At its peak we will have around 60 workers on site.
"We have sub-contracted out some of the work to a number of local firms.
"We are using electrical engineers HW Smith in Weymouth to do all the electrical and mechanical installation, which is a pretty big job.
"We do try to use local resources as much as possible when working away from our base."
The army camp is split into two sites.
One section is used to train Royal Engineers and regular and reserve forces in bridge building.
The second site is a rifle range, which is used for marksmanship training, basic field craft and patrolling exercises.
Parts of the firing range have been designated as important conservation areas and the coastal section has world heritage status.
Dyer and Butler commercial director Neil Edwards said: "The bidding process was long and hard, and we were against some stiff competition.
"As this was a design and build deal it was very complex.
"We had to hire a team of designers to come up with an attractive package which we presented to the MoD along with our report.
"The building arm of our firm is relatively new and this project represents the biggest deal we have landed so far.
"As the client is the MoD we are contractually obligated to keep all but the most basic details secret.
"What I can say is that both buildings will be completely new structures with the catering facility being built on a slope.
"Preliminary work has already started and by the completion date the army will be able to move into a ready-to-use mess and kitchen complete with ovens and any other equipment they need."
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