The first barge to be used to house asylum seekers under widely criticised plans aimed at reducing the reliance on hotels could be unveiled this week.
The Home Office hopes in the coming days to announce a leasing agreement to use the Bibby Stockholm "floatel" in Portland, Dorset, in what could start a fresh Tory row.
Conservative MP Richard Drax, who represents the area, has described the use of boats as "totally and utterly out of the question", and will exacerbate existing problems "ten-fold".
Details of any agreement with the Liverpool-based Bibby Marine Limited and the costs were unclear, but the 93-metre long vessel can house up to 506 people.
According to reports, the three-storey barge has been refurbished since it was criticised as an "oppressive environment" when the Dutch government used it to house asylum seekers.
A Home Office spokeswoman said: "The pressure on the asylum system has continued to grow and requires us to look at a range of accommodation options which offer better value for money for taxpayers than hotels."
Plans to use two ex-military bases and a former prison were met with anger by local Conservatives when they were unveiled last week.
A Conservative-run local authority launched legal action against the Home Office over the proposal to use RAF Scampton in Lincolnshire as a site for up to 2,000 asylum seekers.
Immigration minister Robert Jenrick announced the sites under plans to offer asylum seekers accommodation to cater to their "essential living needs and nothing more".
The Home Office argues new types of accommodation must be used to reduce a £6 million daily bill of using hotels.
South Dorset MP Mr Drax is yet to comment on the possible use of Portland to dock the barge, but he was among Conservatives previously criticising Mr Jenrick's plans.
Enver Solomon, chief executive of the Refugee Council charity, has described the use of military bases and boats as "wholly inadequate places" to house people who have fled war and persecution.