The Somali government says it will submit its dispute with Kenya over their sea border to the International Court of Justice.
The disputed ocean territory stretches for more than 100,000 sq km.
Tests have shown potential reserves of gas in the area.
The dispute has been going on for the last six years, keeping investors away because of a lack of legal clarity over who owns potential off-shore oil and gas reserves.
The BBC’s Rage Hassan says Somalia wants the maritime border to continue along the line of the land border to the south-east, while Kenya wants the sea border to go in a straight line east.
Somalia’s Attorney General Ahmed Ali told the BBC that his government would present a 150-page document arguing its case at the ICJ, which is UN’s top judicial body, based in The Hague.
Kenya’s Attorney General Githu Muigai told the BBC that Somalia had no right to claim what is Kenya’s territorial water. He also confirmed that some concessions have been given to foreign companies to explore oil and gas.
The application comes days after the Kenyan government said it had received a pledge from Mogadishu that it wanted to solve the case out of court.
In 2014 the ICJ gave Somalia the go-ahead to file the case after efforts to settle the dispute outside the court had failed.
The ICJ has asked the Kenyan government to respond by 27 May 2016, after which hearings will begin formally.
It may take several years before the court rules on the matter.