The project comes after the government faced heavy criticism over Hamas's use of tunnels in the 2014 Gaza war.
The project comes after the government faced heavy criticism over Hamas's use of tunnels in the 2014 Gaza war, with a state inquiry earlier this year accusing Prime Minister Benjamin Netanyahu and army top brass of having been unprepared for the threat.
"In the coming months, we are going to accelerate the construction of the barrier," Major General Eyal Zamir told journalists.
"We hope that construction will be complete in two years."
Army radio reported that the wall, comprising concrete planks and sensors, will stretch some 64 kilometres (40 miles).
It is expected to be some six metres (20 feet) high and 40 metres (130 feet) deep, and cost around three billion shekels (710 million euros, $834 million).
It will also include an offshore barrier intended to stop sea-based commando attacks.
Construction Minister Yoav Galant, also a former military commander, said the wall will be built in Israeli territory parallel to the border fence sealing off the Palestinian enclave run by Islamist movement Hamas.
"The fact that the work will be located in our sovereign territory rules out any justification for attacks against those working there," Galant told army radio.
A military official made similar comments to AFP on condition of anonymity, saying "the barrier's purpose is defensive only."
The army also distributed photographs of what it said were two civilian buildings in the north of the Gaza Strip with tunnel entrances within.
Zamir said that "Hamas is digging tunnels under civilian homes in the Gaza Strip and will be held responsible if we are forced to attack targets," he said.
"Residents must understand that we consider those buildings as legitimate targets and that those who live there are putting their lives in danger."
Attack tunnels were a key weapon for Hamas during the 2014 Gaza war.
Hamas also built a vast network of tunnels under Gaza's border with Egypt to smuggle goods and allegedly weapons.
The Israeli army found and destroyed several tunnels during the 2014 war, while Egypt has also destroyed smuggling tunnels.
Israel and Hamas have fought three wars in the Gaza Strip since the group wrested control of the territory from the rival Fatah movement of Palestinian president Mahmud Abbas in 2007.
Destroying the tunnels and stopping Gaza-based Palestinian militants, particularly Hamas, from launching rockets into Israel were the key declared goals of Israel's 2014 offensive.
The war killed 2,251 Palestinians and left 100,000 homeless, according to the United Nations.
On the Israeli side, 74 people were killed, all but six of them soldiers.