Palmer, a self-made mining billionaire, said he had commissioned state-owned Chinese company CSC Jinling Shipyard to construct Titanic II with the same dimensions as its predecessor.
“It will be every bit as luxurious as the original Titanic but of course it will have state-of-the-art 21st century technology and the latest navigation and safety systems.”
“Titanic II will sail in the northern hemisphere and her maiden voyage from England to North America is scheduled for late 2016,” Palmer said in a statement.
He added that he had invited the Chinese navy to escort the Titanic II to New York.
The announcement comes just weeks after the 100th anniversary of the sinking of Titanic, which went down on April 15, 1912 after striking an iceberg on its first voyage, from Southampton to New York.
Palmer said the new ship would be a tribute to the spirit of the men and women who worked on the original, which sank with the loss of 1,514 passengers and crew.
“These people produced work that is still marvelled at more than 100 years later and we want that spirit to go on for another 100 years,” he said.
Titanic was commissioned by White Star Line and was the largest liner in the world at the time.
Palmer said he has established his own shipping company, Blue Star Line, with the new vessel having the same specifications as its predecessor — 270 metres long (885 feet), 53 metres high and weighing some 40,000 tonnes.
It will have 840 rooms and nine decks with design work in conjunction with an historical research team underway. No figure was given on how much it would cost.
The only changes to the original would be below the water line including welding and not riveting, a bulbous bow for greater fuel efficiency, diesel generation and enlarged rudder and bow thrusters for increased manoeuvrability.
“Titanic II will be the ultimate in comfort and luxury with on-board gymnasiums and swimming pools, libraries, high class restaurants and luxury cabins,” Palmer said.