The group says new facilities for security forces and roads have been built around places where Rohingya villages once stood, suggesting the area could be used to accommodate more security forces.
In January, Bangladesh and Myanmar have agreed on a two-year timeframe for the repatriation of hundreds of thousands of Rohingya refugees.
"What we are seeing in Rakhine is an occupation of land by military on a dramatic scale". Myanmar officials have said villages were being bulldozed to make way for new homes for returning refugees.
"The military is not only building security force bases and roads but also bulldozing everything including house, trees, landmarks and even graveyards", said Mohammad Ali, a Rohingya resident of Buthidaung town in northern Rakhine. Construction appears to have started in January.
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Zaw Htay, a government spokesman, said the government was not basing military forces in residential areas but that police stations were part of village construction plans. Numerous villagers saw no option but to flee into Bangladesh.
Despite the ongoing preparations for repatriation, more than 2,500 Rohingyas have crossed into Bangladesh this year.
Myanmar has seen internal ethnic conflicts since gaining independence from the United Kingdom in 1948.
Lee said atrocities against the Rohingya Muslim minority "bear the hallmarks of genocide".
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Turkey has been at the forefront of providing aid to Rohingya refugees, and President Recep Tayyip Erdogan has raised the issue at the UN.
Rakhine State remains among the poorest in Burma (Myanmar) and the government of Aung San Suu Kyi has pledged to invest in rebuilding the region after "clearing operations" by the Tatmadaw army devastated scores of Rohingya villages, leaving them deserted.
A massive new transit centre to temporarily house returning Rohingya is built on top of a burned Rohingya village in Maungdaw Township, and also shows signs of heightened security.
Lee, whose access to Myanmar was denied previous year, also expressed concerns that as the world's attention was drawn to the recent crisis in Rakhine State, scant attention had been afforded to continued and escalating violence in Kachin, Shan and other conflict affected states in the country. The last step of Beijing initiative, which invests in projects of a different nature in Rakhine, is to find a long-term solution based on developing state, one of most depauperados in country.
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UNITED Nations officials said today almost US$1 billion (RM4 billion) is needed this year to feed and care for the roughly one million Rohingya refugees living in overcrowded camps in southeastern Bangladesh.