Dean & Dyball will build build a 390m stretch of sea wall and carry out extensive slope stabilisation measures at Church Cliff and East Cliff, to the east of the town.

Preliminary work at the site, including ecological surveys, ground investigations and treatment of Japanese Knotweed, has already begun.

Major construction work will begin in spring 2013 and last for about two years.

The project won priority funding this year to save 480 homes from destruction and prevent utility pipes and cables from destroyed by ground movement.

Robert Gould, leader of West Dorset District Council, said: “We have been working hard for Lyme Regis and it is great news that we have appointed a contractor for the next stage of our coastal protection works.

“Lyme Regis is on an actively eroding stretch of coast and faces huge challenges from coastal erosion and consequent land slips, which is why this work is so important.

“The scheme will protect the eastern side of Lyme Regis. Without it, substantial areas of housing and the main road into the town would be lost over the next 50 years.”

The district council will work closely with the town council, emergency services, residents, local businesses and the contractor to minimise disruption.

Phase 4 is the last major part of the Lyme Regis Coast Protection Scheme, which was devised in the early 1990s by West Dorset District Council working in cooperation with the town council and local groups.

The overall scheme provides long-term coast protection through a major programme of engineering works.

Earlier phases, funded mainly by Defra, saw the construction of sea walls and promenades.

Beaches were also replenished and slope stabilisation works carried out. Improved sewage treatment was provided in partnership with South West Water and Cobb Road was stabilised and improved by working with Dorset County Council.