The aerospace and defence company has awarded a £31.5 million contract to Robertson Construction for the development of a new assembly hall at the Fife site.
The firm has also placed an order for welding and production panel lines to support the automation of shipbuilding.
The construction project will support about 100 positions locally and a further 100 nationally throughout the supply chain.
It forms part of a £55 million investment programme currently underway on the site, on top of a further £100m that has been invested over the last decade, Babcock added.
The assembly hall will initially be used for the Type 31 Navy frigate programme.
Babcock said it had marked the construction milestone by burying a commemorative time capsule at the site of the new facility.
John Howie, the company’s chief corporate affairs officer, said: “The Type 31 programme is re-energising the UK’s maritime capability through innovative, next generation, UK ship design and build.
“The infrastructure investment underway at Rosyth builds on our exceptional heritage, experience and engineering insight, delivering a very real step change in capacity and capability for modern UK shipbuilding.
“It’s great to see the progress being made across the programme as we invest in new infrastructure and technologies to support the build phase of these fantastic new frigates.”
Progress of the Type 31 facilities at Rosyth follows a preliminary design review, held in June, which provided a key indicator of the compliance and design maturity. The programme is currently progressing through the detailed design phase.
“Team 31” is already operating across the UK in Rosyth, Bristol, Devonport and Crawley, with recruitment underway to support the growth of the programme and mobilisation in readiness for ship building at Rosyth starting next year. At its height some 1,250 people will work on the programme across the UK.
David Cairns, regional managing director, Robertson Construction, said: “The provision of this facility will further enhance the delivery capabilities of Babcock from the Rosyth site. We are pleased to be selected as the delivery partner of choice for the new assembly hall.”