This paper optimises a shipyard layout to minimise the material handling costs during ship construction with regard to the adjacency and alignment conditions of departments. Alignment is a significant factor in shipyard layout design because it potentially reduces the material handling costs by allowing aligned departments to be on a continuous production line, sharing resources. The optimisation process comprises two stages: topological and geometrical optimisations. First, the optimal topology of departments is determined by using a genetic algorithm. Second, a stochastic growth algorithm is used to allow the departments to gradually grow and have their own geometries which satisfy given requirements in area, shape, adjacency, and alignment. A case study is conducted to demonstrate the two-stage algorithm in shipyard layout design in which the effect of considering alignment constraints on shipyard layout design is presented.