The 240 metre breakwater is expected to be completed by next year's summer tourist season.
The contract was signed by Deputy Maritime Affairs, Transport and Infrastructure Minister Zdenko Antesic and Split-Dalmatia County Port Authority Director Domagoj Maroevic.
The first stage of construction, to be completed by May 2013, will provide the Makarska port with 110 new berths, Maroevic said, adding that the first construction stage, costing HRK 20 million, would be financed with HRK 15 million by the County Port Authority and with HRK 2.8 million each by the ministry and the county.
The second stage, costing HRK 10 million, should be completed by the beginning of the 2013 summer tourist season, said Maroevic.
Antesic said the contract was the result of the government's cooperation with local self-government units and that there would be more.
Port infrastructure is important for linking coastal and island towns and the new Makarska breakwater will contribute to the development of tourism and the economy in general, he said.
Antesic urged local communities to use the time before Croatia's accession to the European Union, scheduled for July 1, 2013, to prepare technical and other documents so that their projects could apply for the Union's structural funds, which he said would be "unlimited."
Split-Dalmatia County Prefect Ante Sanader said the county had 12 port infrastructure and coastal belt projects ready, worth HRK 500 million, which could be financed with the EU's structural funds, and that another five projects worth HRK 200 million were being readied.
He added the county expected the government to help in drawing those funds.
(EUR 1 = HRK 7.5)