The tech companies will help design the subsea cable which will run between Virginia in the US and Bilbao, Spain.
The project will be managed by Spanish telecommunications firm Telefonica, which will sell any unused capacity on the cable to other customers.
The cable will help the tech giants move data more quickly and cheaply between their global data centres.
Microsoft said MAREA will help boost the speed and reliability of its cloud services.
Microsoft has also been testing underwater data centres.
Facebook and its 1.23 billion monthly active users are also heavily reliant of transferring data and chief executive Mark Zuckerberg has committed to expanding global internet access.