The project, called 'Real Madrid Resort Island', will be constructed in the UAE at the cost of $1 billion and will be supported by the government of the Emirate of Ras al-Khaimah.
The club hope to attract over one million people per year to the resort, which will be inaugurated in January 2015.
Madrid president Florentino Perez expressed his delight at the fact that Los Blancos are strengthening their position in Asia leading up to the 2022 World Cup in Qatar.
"Santiago Bernabeu gave Real Madrid a unique capacity to go beyond the borders of this country and those who are at the head of this club know that we have to manage the legacy of those who made this institution a myth and a legend," Perez said at the official presentation of the project.
"The 'Real Madrid Resort Island' will be a high-level sporting tourist complex with 50 hectares in which tourism and sports will seduce millions of people who are looking to spend a quality leisure time."
In addition to a theme park with a rollercoaster and a water park, the resort will also feature a 450 bedroom five-star hotel, a shopping mall, a marina, a museum of the club and the world's first stadium with one side open to the sea, with 2,000 seats.
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