The Pentagon has authorised the transfer of $1bn to army engineers for new wall construction along the US-Mexico border.
The funds are the first under the national emergency declared by President Donald Trump to bypass Congress and build the barrier he pledged during his election campaign.
Democrats have protested against the move.
The funds will be used to build about 57 miles (91km) of fencing.
President Trump has called the situation at the southern border a "crisis" and insists a physical barrier is needed to stop criminals crossing into the US. His critics say he has manufactured the border emergency.
A Pentagon statement said acting US Defence Secretary Patrick Shanahan had "authorised the commander of the US Army Corps of Engineers to begin planning and executing up to $1bn in support to the Department of Homeland Security and Customs and Border Patrol".
The statement cited a federal law that "gives the Department of Defence the authority to construct roads and fences and to install lighting to block drug-smuggling corridors across international boundaries of the United States in support of counter-narcotic activities of federal law enforcement agencies".