"A training team of some 20 troops from the 4th Infantry Brigade is now moving to Tunisia to help to counter illegal cross-border movement from Libya in support of the Tunisian authorities," Fallon told Parliament on Monday, Reuters reported.
The move comes after growing Western concern that Islamic State (IS) is seeking to use Libya as a base to plan and carry out attacks. Last June, 30 British holidaymakers were killed when an Islamist gunman attacked a beach at a hotel on Tunisia's Mediterranean coast.
"I... am extremely concerned about the proliferation of Daesh (IS) along the Libyan coastline, which is why we have been urgently assisting the formation of a new Libyan government," Fallon said.
Jihadist groups have taken advantage of political chaos to expand their presence in Libya, and fighters loyal to Islamic State have taken control of the coastal city of Sirte.
Western officials say they are discussing air strikes and special forces operations in Libya against the group that is seeking to set up a cross-border Islamic caliphate and has already seized large areas of Syria and neighboring Iraq.
Fallon said Britain was not currently planning to deploy ground troops to Libya in a combat role.
"Before taking any military action in Libya, we would seek an invitation from the new Libyan Government," he said.