Almost 300 acres of coastal farmland in Essex are to be converted into a haven for wading birds.
The scheme at Wallasea Island near Southend will compensate for the destruction of wetland sites for port developments in the 1990s.
As well as helping birdlife, the scheme is designed to cut flooding risk in nearby communities by providing a natural barrier along the East coast.
The work is expected to cost more than £5m.
The project includes moving the existing sea wall inland, turning cropland into mudflats and salt marshes, which are increasingly rare feeding grounds for wading birds such as plovers, curlews and dunlins.
The project, announced by the government on Thursday, is the latest example of a trend to recreate natural coastlines instead of repairing sea defences.
It is also designed to compensate for a government decision in the 1990s which allowed bird habitats to be destroyed by new port facilities in Kent and Suffolk.
That decision was later declared illegal by the European Court after a challenge from the Royal Society for the Protection of Birds.