Recently, the competitive environment is very tough in shipbuilding industry and under these circumstances, manufacturing a ship in a shorter time becomes significantly important in order to meet the customer demands. Therefore, it is hard to do that by using traditional manufacturing techniques. The shipyards located in Turkey usually have functional locations for the machines and this situation often causes longer production times. Instead of this, assembly lines should be redesigned as workshops in the shipyard. Prefabrication work unit is a good example in which an assembly line is needed to be designed. In this study, an assembly line design for prefabrication work unit was performed. For this, assignments of work operations to work shops were carried out by using Largest Set Rule Algorithm and some alternatives were created according to compare the different values of cycle time. These alternatives were simulated by using a production simulation program and the most appropriate assembly line design was presented.