Bougainville's government says it's taking the Papua New Guinea government to the Supreme Court over the non-payment of funds to the autonomous region.
Under the Bougainville Peace Agreement, signed in 2001, Port Moresby was compelled to make annual payments to the regional government.
But the Bougainville government said it had not received any of the budgeted money this year, which the vice president, Raymond Masono, says was crippling services in the region.
The president, John Momis, had threatened to take the dispute to the courts for months, and now Mr Masono said the government was following through on the threat.
"We've already started the process, we've already engaged one of the most prominent lawyers in Papua New Guinea to take up the case with the Supreme Court," he said.
"We'd like to sort this matter out as soon as possible so that as soon as the new [national] government comes up after the election, we should be able to discuss what the Supreme Court interpretation is."
Raymond Masono said his government believes it was owed about US$250 million by Port Moresby.