Dubai Wholesale City will cover more than 550 million square feet (49.5 million square metres) and be able to house 15,000 wholesale traders, state news agency WAM reported.
Home to one of the world's largest free trade zones at Jebel Ali, Dubai is aiming to increase its share of a global sector valued at $4.3 trillion, WAM said.
It said that the investments will be channelled into the project over a period of 10 years.
"Trade has been the basis for the prosperity of our country," said Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum, who is also the Vice President and prime minister of the United Arab Emirates.
Dubai Holding will to develop the project, WAM said.