Turkmen President Kurbanguly Berdymukhamedov and Turkish Prime Minister Recep Tayyip Erdoğan took part in a ground-breaking ceremony in the western town of Turkmenbashi where the new port will be built by Turkish construction firm Gap Insaat.
An 800-km pipeline is already being built from the country's giant Galkynysh gas field, the world's second-largest natural gas deposit, to Turkmenbashi to lessen dependence on exports to Russia.
Turkmenbashi, formerly known as Krasnovodsk, is now named after the self-given title to Saparamurat Niyazov, the autocratic President for life of Turkmenistan, who died in 2006.
Turkmenistan, which neighbours Iran and Afghanistan, holds the world's fourth-largest natural gas reserves and possesses vast reserves of oil in the Caspian, estimated at 12 billion tonnes. It is also a major producer of cotton.
Over the two decades of independence from the former Soviet Union, the mainly Muslim Central Asian nation of 5.5 million has invested billions of dollars on industrial infrastructure to process its hydrocarbons and cotton.
The new port in Turkmenbashi will be used to export oil products, liquefied gas and textiles.
Imports already reach Turkmenistan via Russia's Volga-Don Canal but Berdymukhamedov said the new port would make it quicker for European countries to export to markets in the Middle East and would boost capital investment in the region.
A Turkmen government official said that four port terminals - including one for passenger ships - and a ship-building yard would be built within four years.
Annual freight turnover at the port is expected to grow to 25 million tonnes by 2020 compared with 10 million tonnes now, according to Turkmen government data.
The town of Turkmenbashi already hosts a Soviet-era oil refinery, the country's largest.