During the process of collision avoidance, especially in a multi-ship encounter situation, the dynamic interactions among individual ships impose a significant impact on collision avoidance decision-making. It is imperative, therefore, that collision avoidance decisions are formulated with a comprehensive consideration of not only the current direct collision conflict but also the potential conflicts due to planned collision avoidance actions. To address this requirement, this paper proposes a dynamic conflict cluster detection method for collision avoidance decision-making in multi-ship encounters. The involved ships are clustered into stable temporal-dependent ship conflict groups taking into account both conflict connectivity and the potential spatiotemporal interactions originating from planned collision avoidance actions. The conflict cluster detection model is implemented within a framework to achieve hierarchical coordinated collision avoidance decision-making. By a simulation experiment of an 11-ship encounter, the proposed method successfully discerns the ships with conflicts and provides feasible collision avoidance decisions. Compared to the non-cluster collision avoidance methods, the proposed method generates the results with acceptable deviating distance and number of collision avoidance actions at minimum computation load. It has been demonstrated that the proposed method is both effective and efficient for officers on board and operators at Vessel Traffic Services centers in real-life navigation.