A plane carrying one million euros (£852,600) has been sent to Cyprus as a "contingency measure" to help troops and their families.
The Ministry of Defence (MoD) said the RAF flight, which left on Tuesday afternoon, will provide people with emergency loans in the event that cash machines and debit cards stop working completely.
The MoD said it is determined to minimise the impact of the Cyprus banking crisis on "our people" and it will consider further shipments if required.
The announcement comes amid moves by the government today to re-assure British troops posted to Cyprus that they will be fully compensated for any plans to raid their savings.
The MoD said that as well as sending out the emergency fund, it is asking personnel if they would prefer this and future months' salaries to be paid into UK bank accounts.
It said in a statement: "An RAF flight left for Cyprus this afternoon with one million euro on board as a contingency measure to provide military personnel and their families with emergency loans in the event that cash machines and debit cards stop working completely.
"We will keep this under review and consider further shipments if required.
strong>Cypriots have been protesting the agreement to strip savings
"The MoD is proactively approaching personnel to ask if they want their March, and future months' salaries paid into UK bank accounts, rather than Cypriot accounts.
"We're determined to do everything we can to minimise the impact of the Cyprus banking crisis on our people."
The position of more than 3,000 British service personnel was thrown into doubt yesterday when Treasury Minister Greg Clark only went as far as saying that they would not suffer "unreasonable losses" as a result of the planned levy.
However, George Osborne told Cabinet that UK Armed Forces personnel and civil servants posted to Cyprus will be "compensated in full" for any losses as a result of the planned levy on savings.
The Chancellor's comments confirm a pledge he made on Sunday that "people who are doing their duty for our country in Cyprus will be protected from this Cypriot bank tax".
The Cypriot government is planning to impose the levy to secure an international rescue of the country's troubled banks.
EU ministers and officials have said 5.8 billion euro (£4.9 billion) of the 15.8 billion euro (£13.5 billion) rescue package must be raised by Cyprus.
Britain's MEPs have condemned the Cyprus bailout agreement, with Peter Skinner, Labour MEP for the South East, saying it could be dangerous as a precedent.
Stock markets fell earlier in the week amid fears the move could spark another financial crisis in the eurozone.
After prompting an outcry from depositors, Cypriot politicians have been considering the possibility that savers with smaller deposits should escape having to pay.
The country's banks remain closed until Thursday, and analysts are warning that the plans set a troubling precedent, undermine confidence and could trigger an exodus of money.
Outlining today's Cabinet discussion, Prime Minister David Cameron's official spokesman said: "The Chancellor set out the position that both he and the Foreign Secretary made clear at the weekend, which is that all UK personnel will be compensated in full for any losses as a result of the decisions that may be taken with regard to the Cyprus banking situation."
Unlike the previous rescues for Greece, Portugal, Ireland, and Spanish banks, the proposed Cypriot bailout is the first one that dips into people's bank accounts to finance the measures.
Suggestions have been made that eurozone leaders, particularly in Germany, insisted on the levy because of the large amount of Russian capital kept in Cypriot banks, amid fears of money-laundering.