Casino giant MGM Mirage has announced plans to create a $4bn (£2.2bn, €3.1) urban metropolis in the city centre of Las Vegas.

The 66-acre Project CityCenter, located at the heart of the Las Vegas Strip, will be constructed in three phases.

The first phase will include the development of 18 million sq ft (1.67 million sq m) of space consisting of a 4,000-room hotel casino, three 400-room boutique hotels and around 550,000 sq ft (51,000sq m) of dining and entertainment venues.

The boutique hotels are expected to be operated by world-renowned hoteliers not currently represented in Las Vegas.

MGM said it would immediately begin work on the design of Project CityCentre, which it anticipates will be completed in 18 months.

It expects the construction of the first phase to then take around 42 months with completion due in 2010.

Terry Lanni, chief executive officer, said: “We have long been aware that our acreage between Bellagio and monta Carlo represents the most compelling development opportunity in Las Vegas and possibly the country.

“Our masterplan represents a significant new direction for our city and our company. Las Vegas has taken initial steps to becoming a major urban centre in the western United States.”

MGM will work closely with Clark County officials to integrate the Project CityCenter into the community during the 18-month design phase. Jim Murren, MGM’s president, said: “In developing Project CityCentre, we engaged three renowned urban planning firms to create an overall masterplan.

“After an eight-month period process involving all three firms, our board has selected the masterplan design of Ehrenkrantz, Eckstut and Kuhn Architects. A project of this scope should be prudently implemented over time in phases and we look forward to working with our partners to plan and design Project CityCenter.”

Upon completion, the scheme is expected to create more than 12,000 permanent jobs.

MGM operates 11 casino resorts in the US and controls around 50 per cent of Las Vegas’s hotel market following its $7.9bn (£4.4bn) merger earlier this year with Mandalay Resort Group.