The conventional exterior acoustic Helmholtz boundary integral equation is prohibitively expensive for solving large-scale engineering problems. In order to effectively overcome this problem, the fast multipole method is introduced to the BIE, and accelerates the iterative solution for the system matrix equation. Due to using the diagonal form multipole expansions of the fundamental solution in the BIE, the computational efficiency of the new fast multipole boundary element method (FMBEM) is improved significantly compared to the conventional BEM. Both the computational complexity and memory requirement of the FMBEM are drastically reduced to O(N), where N is the number of degrees of freedom (DOFs). Numerical examples including a large submarine model with more than 420000 DOFs demonstrate the accuracy and efficiency of the FMBEM, and clearly show the advantage of the new algorithm for solving the large-scale acoustic problems. The developed FMBEM would be potential for engineering applications.