Singapore's transport ministry has raised concerns with Malaysia over the latter's establishment of a permanent Restricted Area for military activities over Pasir Gudang from 2 January.
Singapore has described the move as having an "adverse impact on civil aviation".
"The Restricted Area being within a controlled and congested airspace will impact the existing and normal operations of aircraft transiting through the airspace," says the ministry in a statement.
Singapore has also proposed a meeting with Malaysia over the issue, which was first announced on 25 December 2018.
The Pasir Gudang industrial area is located just 2km away from Singapore's Seletar airport.
This is the latest in a string of developments in a bilateral dispute between the two countries.
Malaysia opposes Singapore’s plan to implement procedures for an instrument landing system at Seletar, arguing that the move would “stunt development" around the Pasir Gudang industrial area, including imposing height restrictions on buildings and affecting port activities.
It has also said that it wants to take back airspace delegated to Singapore under an agreement in 1974.
Besides the airspace issue, the two countries are also in a dispute over maritime borders.