Engineers will be taken off the company's Neptune project, which aimed to generate electricity from tidal flows, to join workers on its Oyster "wave energy converter".
Martin McAdam, who was last year appointed as Aquamarine's chief executive, told The Scotsman that the decision followed a strategic review by the company's board.
He said that more than 40 million had been earmarked over the next five years for Neptune but mothballing the project would "reduce the amount of equity" the company requires and also free-up cash for Oyster.
McAdam also expressed his desire to see Oyster units built in Scotland rather than being farmed out for manufacturing to the Far East.
Oyster is currently undergoing a full system test onshore, with McAdam expecting the results "within days".
This summer, Oyster is expected to undergo its first sea trials off the west coast of Orkney, as part of development work at the islands' European Marine Energy Centre (EMEC).
Half of Aquamarine is owned by Scottish & Southern Energy (SSE) following the merger of Aquamarine and SSE's Renewable Technology Ventures subsidiary in October 2007. Neptune had been one of SSE's renewable energy projects.
McAdam explained: "We had a strategy review with our board and looked at how we could get our company to be a commercial business in the shortest possible time frame.
"We're much closer commercially with Oyster and so decided to deploy all our resources to wave technology and accelerate that area."
He added: "We had a big challenge in taking two technologies forward simultaneously. We can see that the quickest path to commercialising technology is to take forward Oyster. It's easier for shareholders to see how they can get a return more quickly."
McAdam said the company had grown "very rapidly", going from eight staff to 33 in the past six months.
He continued: "We've designed Oyster here, we're engineered it here, built the test rig here, we're testing it at EMEC for real this summer – when we start manufacturing them, why should I send the plans to Korea or China? It makes no sense."
Aquamarine expects to make Oyster available commercially by 2014, with the devices designed to work in arrays generating 100 megawatts of power.
Aquamarine's Oyster is "a big dumb machine" according to McAdam, who said the devices strength was in its simplicity, with little in the way of technology to break under the water. He said Oyster was "very unsophisticated" in terms of what goes into the water, with a big floating hinge, two hydraulic water pistons and four valves leaving little to be damaged.
In contrast, McAdam described tidal flow devices as "wind turbine that operate underwater" and as such are much more complex.