US Secretary of Defence Mark Esper has granted $3.6bn (£3bn) in Pentagon funding to be redirected to help build a US-Mexico border wall.
The money will fund 175 miles (280km) of construction and will force 127 military projects to be put on hold, he told lawmakers in a letter on Tuesday.
Building a border wall was a major campaign pledge of President Trump but it has faced significant opposition.
Tough action on immigration also forms a central part of his re-election bid.
Mr Esper's letter did not use the term "wall" but the border barriers described are likely to be cited by Mr Trump as evidence of progress as he gears up for the vote in 2020.
Last July, the Supreme Court handed Mr Trump a victory in a related case, saying that the national emergency he issued in February allowed him the power to use $2.5bn in defence funds for wall construction while the matter proceeds in courts.
In a letter sent to several congressional committees, the Department of Defense identified the 127 military construction projects worldwide that stand to lose funding on behalf of the border wall.
Democrats argue that by diverting funds to the wall, the Trump administration is attempting to circumvent Congress' role in making budgets for government agencies.
Democrat Senate Minority Leader Chuck Schumer said it showed Mr Trump "is willing to cannibalise already allocated military funding to boost his own ego and for a wall he promised Mexico would pay to build".
The American Civil Liberties Union promised to seek a court order to block "the president's abuse of emergency powers to secure funds for a wall Congress denied".
Building up to election time
Donald Trump promised to use military construction money to fund his long-promised Mexican border wall. Now that order is being recorded on paper and put into action.
That may cause some political difficulties for the president, but it's clear he believes the potential damage from not following through on his 2016 border-wall campaign pledge - even if the funds are coming from US taxpayers, not Mexico - is greater than the risk of disgruntled constituents and interested parties.
It wasn't too long ago that border walling was a non-controversial proposition, tucked into larger spending legislation. That was before Donald Trump made it the most visible embodiment of his immigration policies, however.
Mr Trump has already tweeted aerial video of new border wall construction (technically, just replacement barriers). His goal is to have even more footage to point to - and, perhaps, stand smiling alongside - as his 2020 presidential re-election campaign picks up steam.
What is being defunded?
In a letter released on Wednesday evening, first reported by The Daily Beast, Mr Esper identifies 127 projects that stand to lose funding at the expense of the border wall.
This list includes projects across 23 US states, three US territories and 20 countries. More than $1bn in mainland projects - with a wide array of purposes -will likely be shelved, including $40m to update hazardous waste storage in Virginia and $95m for an engineering centre in New York.
Nearly $700m will be diverted from projects in US territories Puerto Rico, the Virgin Islands and Guam. Of these Puerto Rico will be hit hardest: the island stands to lose $400m worth of planned projects.
Approximately $770m will be taken from projects across Europe, directed at helping allied countries deter a possible attack from Russia.
Nine projects overall affect the renovation and replacement of schools for children on US military bases across the world.
According to the Pentagon, the affected projects have not been cancelled outright but have been "deferred".
For the projects to be resumed, however, Congress must agree to do so in its annual defence policy bill. If Congress fails to do so, they will be stuck in legislative limbo and effectively defunded.