Saudi Arabia's Crown Prince Mohammed bin Salman on Wednesday revealed a master plan for the Rua Al Madinah project on a site to the east of the Prophet’s Mosque.
Once completed, the development will boost the area's capacity, allowing it to host up to 30 million Umrah pilgrims, the Saudi Press Agency reported.
The construction project is part of development efforts by the Public Investment Fund in line with the Kingdom's Vision 2030.
Under the project, to be built on an area of 1.5 million square metres, 47,000 new hotel rooms will be available by 2030.
Open spaces and green areas will comprise 63 per cent of the site.
Luxury hotels, modern urban planning and large-scale development projects will contribute to an increased quality of life for visitors and people living in Saudi Arabia.
The initiative is being overseen by Rua Al Madinah Holding Company, a Public Investment Fund group that specialises in development, operation and property investment in Madinah, state media reported.
The project showcases many historical monuments that are of huge significance to the legacy of the Prophet Mohammed, while the holy city’s unique heritage is reflected in the design of all buildings and amenities, SPA reported.
A metro station, routes for self-driving vehicles, nine bus stops and underground parking spaces will be included.
Residents say the city, which is revered by billions of Muslims due to its prominence in the Islamic world, has experienced progressive change.
"Madinah is a sacred city for Muslims all over the world because it is the city of our beloved Prophet [Mohammed]," said Sameera Abdul, a local resident. "I am happy people will be able to witness the wonders of the city and the warmth of the people in Madinah, which is known for its hospitality."
Ghada, a Saudi resident in Jeddah, said: "I especially love the new art centre, which we never had up until 2018. The Vision 2030 is helping us connect with different regions, our past and broadening artistic horizons, with the help of art and exposure in different cities around the world."
The development aims to consolidate the city’s position as a modern Islamic and cultural destination and will help to create jobs.
"Madinah is the most peaceful city in the world," said Mahmood Izhar, an Indian resident of Madinah. "I am looking forward to the cultural destinations and what they will be showcasing as part of our rich Islamic heritage and culture. There aren't many luxury hotels or urban developments like it in major cities in the world yet but I am glad they will be added to our city."
Prince Mohammed is the chairman of the Council of Economic and Development Affairs and chairman of the Public Investment Fund.