The decision to extend the Royal Dockyard at Devonport was taken in 1895 when Lord Goschen (1831-1907) was the First Lord of the Admiralty.  Under the Schedule to the Naval Works Act 1896 funding was proposed for alterations at Keyham Dockyard, including £175,000 for fixed  machinery, between 1903 and 1904, as well as at the Royal Naval Barracks and the Royal Naval Engineering College.  A separate amount of £960,000 was also set aside for deepening harbours and approaches to all the establishments mentioned in the Act collectively.

During the construction of the Keyham Steam Yard, the surplus shaley rock was dumped at the Weston Mill Creek end of the land north of Keyham Creek.  At the southern end of the site the remains of the brook that once filled Keyham Creek, otherwise Keyham Lake, flowed through fields into the Hamoaze.  Here there was also a sewer which had to be diverted.  There was about 77 acres lying above low water mark and below high water mark, all of Devonian shale or shellat.  The first work to be undertaken was to construct a retaining wall for the Parade Ground of the Royal Naval Barracks, to form a new road to the Barracks, to lay a new gas main pipe, and divert the sewerage system.  The retaining wall was made of concrete laid upon the exposed natural rock.

From the start until November 1906 the work was done under the supervision of Superintending Civil Engineer, Mr Whately Eliot MInstCE.  Mr W J Clarke MInstCE took over that role.  Mr H Sadler AMInstCE was their Chief Assistant Civil Engineer.

These extension works were to add 120 acres to the existing Dockyard, almost doubling its size.  The contract for the work was awarded on January 1st 1896 to Messrs Sir John Jackson Limited, of London.  His Chief Agent was Mr George Hall Scott and his Superintending Civil Engineer was Mr S A Lane.

At the northern end of North Yard, formerly the Keyham Steam Yard, was to be constructed a tidal basin, later known as Basin number 4.  This was to measure 600 feet by 740 feet and cover 10 acres and 37 perches.  This would create wharfage of about 2,000 feet.  The entrance to this tidal basin was 120 feet in width.

Outside of Basin 4, and linking the Hamoaze to Basin 5, was the North Lock, 730 feet in length and 181 feet in width.  Caisson K gave access from the Hamoaze while Caisson Q connected the Lock with Basin 5.  The Caissons were both 95 feet in width.  This Lock was constructed in such a way that it could be used as a dry dock and the Caissons could also be fitted against outside stops which enabled its length to be increased to 787 feet.

Alongside and to the east of North Lock were Dock 8, Dock 9 and Dock 10, the latter being nearest to the Lock.  Dock 9 and Dock 10 could be accessed from both Basin 4 and Basin 5 while Dock 8 could only be entered from Basin 5.

Next came Basin number 5, known at the time as the Closed Basin, later to be named The Prince of Wales Basin.  This was 1,550 feet in length and about 1,000 feet  in width and covered an area of 34 acres 9 perches.  The Pier at the Basin's northern end was 500 feet in length and 75 feet in width, which increased the quayside within the Basin to 5,000 feet.

While the retaining wall referred to earlier was being built, the entire site was being enclosed within a Cofferdam so that the whole of the site could be drained.  In addition, two smaller Cofferdams were constructed running transversely across the site to enable excavation work on the Docks to progress before the main Cofferdam had been completed.  All in all these came to some 7,000 feet.  The river wall was the last work to be completed.

The main contract with Sir John Jackson's company cost around £3¼ million.  A separate contract was awarded to the Thames Iron Works, Shipbuilding and Engineering Company Limited, while the contract for the completion of the machinery in connection with the Caissons was awarded to the Hydraulic Engineering Company, of Chester.  The Caissons cost around £360,000 while the machinery and cranes added a further £235,000 to the cost.  The workshops, store-houses and railway tracks around the Docks cost a further £350,000.  The cost of the electric generating plant is not known.  Thus the total cost was nearer £4¼ million.