DCNS, the French state-controlled naval company, said it will work in partnership with French companies Areva, EDF, and the French Atomic Energy Commission to build small- and medium-sized underwater reactors to provide electricity to consumers on land, Radio France Internationale reported.
The company said its Flexblue project, expected to enter the building phase in 2013, is in response to global energy challenges and renewed interest in nuclear power.
Flexblue "reduces greenhouse gas emissions while conserving fossil fuels," the company said in a statement.
Engineers have been working on plans to create a capsule-shaped reactor that would be moored on the sea floor several miles off the coast, the company said.
DCNS Chief Executive Officer Patrick Boissier told the French publication Usine Nouvelle underwater reactors are safer, and less vulnerable to terrorist attack and natural disasters than those on land.
"The reactor would produce safe, competitive energy, that does not emit any carbon," Boissier said.
Much of France's electricity is from nuclear power.