The machine, called SeaGen, is being embedded in Strangford Lough, which is home to one of the fastest flowing currents in the world.
It is likely to be generating power for up to 1,000 local homes by this summer.
Maker Marine Current Turbines hopes that the tidal technology could be replicated across the UK and the wider world – a sentiment echoed by the UK Government.
John Hutton, Minister for Business, Enterprise and Regulatory Reform, said: “It’s this sort of project which will help the UK meet our ambitious targets to significantly increase the amount of energy from renewable sources.
“I am proud that my department has played a part in the development of SeaGen, granting £5.2m of funds to help take it from the drawing board.
“Marine power has the potential to make a significant contribution to our energy generation needs.
“I hope the success of this project will inspire others to follow its lead.”
Ben Meggeson