Construction work is set to begin on a huge urban development in Saudi Arabia – described as one of the "world's ambitious building projects".

NEOM, which has a total area of 26,500sq km (10,200 sq mi), is described as a smart tourist city in the northeast of Saudi Arabia, consisting of visitor attractions, cultural venues, sports facilities and vast residential areas.

It is the flagship project of Saudi Arabia’s Vision 2030 – a strategic plan to reduce the country's dependence on oil and to diversify its economy through the development of public service sectors such as tourism, health, education and recreation.

The US$500bn project will be funded by the government.

“NEOM is all about the unusual and the unexpected," said Nadhmi Al-Nasr, CEO of the NEOM project.

"NEOM is futuristic, risky and daring and it’s more than a dream: it’s a plan to enhance how we work and live.”

Work on the first phase of the project, called NEOM Bay, is set to begin "within weeks".

NEOM Bay will include a wide range of resorts, tourist attractions and sports venues.

To celebrate the beginning of the works, the government of Saudi Arabia hosted an extreme sports event at the site of the first phase.

“The reason we chose extreme adventure sports at the first event in NEOM is because it’s a beautiful environment,” said Jason Harborow, head of NEOM’s Future of Sport sector.

“Sport is right at the centre of what we want to achieve at NEOM, and that means sport for all: male, female, children and athletes with disabilities. NEOM will be for everybody.”

The name NEOM is derived from two words. The first three letters form the ancient Greek prefix neo- meaning “new”. The fourth letter is from the abbreviation of Mostaqbal, an Arabic word meaning “future”.