Construction of a hot spring resort has begun in Qingdao, an Olympic co-host city in east China's Shandong Province, the local construction authority said on Monday.

The project, claiming to be the largest in China upon completion in 2009, will cover 120,000 square meters and involve 4.5 billion yuan (642 million U.S. dollars) in investment from China Travel Service (Holding) Hong Kong Ltd.

Located in the coastal township of Aoshanwei, the entertainment compound is about 40 kilometers from the downtown area of Qingdao, a venue of the sailing competition of the upcoming sports event.

Boasting five-star hotels, indoor and outdoor hot spring facilities, international convention centers and theaters, the seaside resort will be able to receive 2.8 million holiday makers every year.