It will be the first stage of a 1.5km, VND115 billion (US$5.5 million) embankment along Cua Dai beach. The project is expected to be completed before the rainy season starts in October.
Vice chairman of Hoi An City's People's Committee, Nguyen Van Dung, said the first stage would protect the beachfront from Vinpearl Hoi An resort up to Pusionalya resort.
Erosion has come closer to the main section of the 1.5km road connecting the beach with Hoi An, threatening dozens of resorts. Rising sea levels have already washed a 20-hectare area of Cua Dai beach away.
Local authorities have also approved a project to plant 140ha of Nipa palm along the Thu Bon River to protect the city from sea erosion and to reduce sand drift.
Claude Balland, general manager of the Victoria Hoi An resort, said he spends thousands of dollars annually to protect his resort from erosion.
"The beach once stretched 200m, but now it has narrowed to a few metres. We have to hire a beach beside our resort to serve tourists," Ballard said.
He said the resort had proposed to build a 200m underwater dyke at a cost of US$2 million with four other resorts –the Sunrise, Golden Sand and Palm Garden - but the plan fell through because one resort did not agree.
Cua Dai beach, which is 5km from Hoi An's old quarter, is a favourite location for tourists visiting the UNESCO-recognised ancient city.