The plan – a first for the UK – is criticised for being “completely inadequate” by refugee groups.
About 500 adult male migrants will be housed in a barge on the Dorset coast “in the coming months”, the government has confirmed.
The plans have been criticised by local groups, refugee charities and Conservative MP Richard Drax, who said “every action’s being looked at”.
The Home Office says the 222-room vessel called Bibby Stockholm will be “significantly cheaper than hotels”.
The government says it costs more than £6m a day to house migrants in hotels.
The three-storey barge, which will be located at Portland Port off the coastal town of Weymouth, will be used to house migrants while they are waiting for their asylum claims to be processed. It will be operational for at least 18 months.
As well as providing basic and functional accommodation, healthcare and catering – the berthed vessel will have security on board to minimise disruption to local communities, says the Home Office.
The boat has been refurbished since it was criticised as an “oppressive environment” when the Dutch government used it for asylum seekers.
It now has en-suite rooms, a TV and games room and a gym, according to a fact sheet from its owners, Bibby Marine.
Prime Minister Rishi Sunak said the plans would save taxpayer money and reduce pressure on hotels, adding: “It’s part of our broader plan to stop the boats.”
“It can’t be right” that the country is spending so much on housing migrants in hotels, the PM told reporters in Peterborough.
It is the first time that migrants will be housed in a berthed vessel in the UK.
The Home Office said it was in discussion with other ports and further vessels would be announced “in due course”.
Charities and local councillors have opposed the plans, with the Refugee Council saying the barge will be “completely inadequate” to house “vulnerable people”.
“A floating barge does not provide what they need nor the respect, dignity and support they deserve,” said chief executive Enver Solomon.
Amnesty International called for the plans to be abandoned, and said use of the barge to house migrants was a “ministerial cruelty”.
Dorset Council said it had “serious reservations” about the suitability of Portland Port as a location, adding: “We remain opposed to the proposals.”
This comes weeks after the government announced plans to tackle small boat crossings through the Illegal Immigration Bill. The legislation would mean anyone found to have entered the country illegally would not only be removed from the UK within 28 days, but also be blocked from returning or claiming British citizenship in future.