Investigation of magnetic signatures produced by ships in Earth’s magnetic field plays an important role in naval ship design and these signatures need to be kept below safe levels. If the magnetic signature is predicted accurately, then the threat of detection of the ship by sea mines can be avoided by the design of degaussing coils to cancel the magnetic signature. The main source of static magnetic (SM) signature is the ferromagnetic material used for the vessel construction. The vessel could be subjected to severe rolling and pitching motions, depending upon the weather conditions. As a result, eddy currents are generated in the vicinity of the vessel (electrically conducting material) due to such motions, affecting the magnetic signature considerably. In the present work SM signature and the effect of eddy current on SM signature is investigated for a naval vessel. FE based computational electromagnetic methodology is followed for magnetic signature prediction. In the initial design stage details of critical equipment having considerable ferromagnetic material, e.g. mai engine (ME) are normally not available. Thus the effect of modelling such equipment on SM is investigatedwith suitable approximations. The study emphasizes the importance of accurate modelling of internal ship structure and the critical equipment. Considering the contribution of deck plating, bulkheads, the orientation and location of certain equipment significantly alters the magnetic signature. A detailed investigation is carried out towards most appropriate prediction of such signature. Vessel is considered fixed for the simulation purpose. Thus in order to simulate eddy currents, earth’s magnetic field is varied in accordance with already computed vessel motion. The signature thus computed can be considered for preliminary design of degaussing coils.