The Home Office has confirmed that a barge will be used to house asylum seekers off the Dorset coast.
The Bibby Stockholm barge will accommodate about 500 single adult males at Portland Port whilst their asylum claims are processed.
It will be the first of its kind in the UK, with the Home Office saying it is "exploring the use of further vessels to accommodate migrants."
The barge will be operational for at least 18 months and will remain berthed in the port during that period of time.
Migrants are due to be moved onto the Bibby Stockholm in the coming months.
Cllr Paul Kimber, Dorset Councillor for Portland said he was "flabbergasted" at the decision to keep migrants in what he called "inhumane conditions".
He said: "Portland is completely unsuitable for this, we have not got the facilities, we are miles away from being able to process the people coming here and it is inhumane and morally wrong to house people in such conditions.
"The amount of money spent on this should have been spent on hiring a lot more immigration officers to deal with the backlog in processing."
In a statement, the Home Office said the plans will "reduce the reliance on expensive hotels and deliver a more orderly, cost-effective and sustainable asylum accommodation system."
The statement wrote: "Today (Wednesday 5 April), the Home Office has announced that an accommodation barge in Portland Port, Dorset will be used to reduce the unsustainable pressure on the UK’s asylum system and cut the cost to the taxpayer caused by the significant increase in Channel crossings. Currently hotel accommodation for asylum seekers is costing £6 million a day.
"The barge, called the Bibby Stockholm, will be berthed in Portland Port and will accommodate about 500 single adult males whilst their asylum claims are processed. It will provide basic and functional accommodation, and healthcare provision, catering facilities and 24/7 security will be in place on board, to minimise the disruption to local communities. People whose claims are refused and have exhausted their appeal rights will be removed from the UK."
Immigration Minister Robert Jenrick said: “The Home Secretary and I have been clear that the use of expensive hotels to house those making unnecessary and dangerous journeys must stop. We will not elevate the interests of illegal migrants over the British people we are elected to serve.
“We have to use alternative accommodation options, as our European neighbours are doing – including the use of barges and ferries to save the British taxpayer money and to prevent the UK from becoming a magnet for asylum shoppers in Europe.
“All accommodation will meet our legal obligations and we will work closely with the local community to address their concerns, including through financial support.”
Bill Reeves, Chief Executive of Portland Port, said: "We are keen to play our part in the national effort to house some of the thousands of people needing accommodation.
"We encourage everyone in the community to approach this with an open mind and help us show other areas just how successful this type of initiative can be, both for the migrants and the local community.
"There will be close co-operation with local agencies, including the health and emergency services during the preparations for the vessel’s arrival and its operation. We will also work closely with the local community and voluntary groups.”
Reacting to the news, a Dorset Council spokesperson said: "We are aware of the Home Secretary's announcement this afternoon, confirming that the Home Office wishes to proceed with its plans to house asylum seekers in floating accommodation at Portland Port.
"Dorset Council's position has not changed. We still have serious reservations about the appropriateness of Portland Port in this scenario and we remain opposed to the proposals.
"However, the council will continue to support and acknowledge the concerns of our residents and local businesses.
"There are a number of questions which the Home Secretary's announcement does not address, we will continue to press the Home Office for answers and await further information."
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