The scheme will protect the town and the surrounding coastline from rising sea levels, preventing flooding and coastal erosion.
Aberaeron is exposed to a wide range of wave conditions with storm waves entering through the harbour entrance causing overtopping of the harbour walls.
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Work will involve the construction of flood walls, a new rock breakwater, refurbishment of the South Pier, installation of a new flood gate and improvements to existing coastal defences.
Ian Hubbard, BAM Regional Director for Southern England and Wales, said: "We are already seeing the impact of climate change in the UK on rising sea levels. Our work in Aberaeron will help to protect the local community for decades to come. As we start these vital works, we will work in partnership with the local community and businesses. We will focus on minimising disruption and having a positive impact on the local community, by creating jobs and opportunities for local people."
