Emergency service divers were seen on a rigid-hull inflatable boat early on Tuesday morning at the Barragem do Arade – around 30 miles from Praia da Luz, where the three-year-old went missing in 2007.
Officers concentrated their search at one area of the reservoir – erecting white tents on a hill on the banks and were seen taking a number of bags from the zone.
Further around the water, emergency services and officials from Portugal, Germany and the UK were seen holding briefings near blue police tents.
In the search area, uniformed and plain-clothed officers spent a number of hours scouring the banks – hammering away at the ground with pickaxes and combing through small rocks with rakes and spades.
A track leading to the search area was cordoned off with police tape and marked vehicles from Portugal’s National Republican Guard.
The new searches come as the Home Office granted an extra £110,000 in funding this financial year for the Metropolitan Police to assist with finding Madeleine, down from just over £300,000 last year.
The total funding given to Operation Grange has been just under £13.1 million since 2011.
Portuguese police confirmed on Monday that they are co-ordinating searches in the Algarve at the request of German police and in the presence of British officers.
The Metropolitan Police said officers will be there in order to inform Madeleine’s family if there are any developments.
Detective Chief Inspector Mark Cranwell said: “The Met continues to work with and support colleagues in Portugal and Germany, with their investigations into the disappearance of Madeleine McCann.
“Met officers will be in Portugal and I am grateful to the Policia Judiciaria and Bundeskriminalamt for allowing us to be present whilst their work is ongoing, so that we can inform Madeleine’s family of any developments.”
A brief statement from the prosecutor’s office in the German city of Braunschweig confirmed the search, but did not reveal why it was taking place.
Braunschweig prosecutor Christian Wolters told reporters that investigators were acting on the basis of “certain tips” but would not give further details.
Four teams of officers from the Portuguese Policia Judiciaria are involved in the operation, along with at least 20 of their German counterparts, Portuguese news outlet SIC said.
It has been reported that the prime suspect in Madeleine’s disappearance, convicted sex offender Christian Brueckner, 45, spent time in the area between 2000 and 2017.
Investigators believe he killed Madeleine after abducting her from a holiday apartment.
Brueckner, who has denied involvement in Madeleine’s disappearance, was first identified as a suspect by German investigators.
The Sun reported that the search was sparked after they discovered video and photos of Brueckner near the reservoir.
A no-fly zone has been put in place over the water and media and other onlookers are being kept a mile back from the site of the search.
Brueckner is facing charges in Germany over a number of separate sex offences allegedly committed in Portugal during that time.
It is not the first time the reservoir has been searched.
In 2008, Portuguese lawyer Marcos Aragao Correia paid for specialist divers to search it after he claimed to have been tipped off by criminal contacts that Madeleine’s body was there.
The most recent search in Portugal in relation to her disappearance was in 2014, when British police were given permission to examine scrubland near where she vanished.
Earlier this month, Madeleine’s parents Kate and Gerry McCann posted a short statement on their Find Madeleine Campaign website to mark the anniversary of her disappearance.
They said: “Today marks the 16th anniversary of Madeleine’s abduction.
“Still missing… still very much missed.
“It is hard to find the words to convey how we feel.
“The police investigation continues, and we await a breakthrough.”