The project, to be run by the army, is a major step by new President Abdel Fattah al-Sisi to stimulate Egypt's struggling economy and recalled some of the grand national programs of one of Sisi's predecessors, army strongman Gamal Abdel Nasser.
The Suez Canal earns Egypt about $5bn a year, a vital source of hard currency for a country that has suffered a slump in tourism and foreign investment since 2011. An official in the Suez Canal Authority told Reuters the new canal was set to boost annual revenues to $13.5bn by 2023.
"This giant project will be the creation of a new Suez Canal parallel to the current channel of a total length of 72 kilometers (44.74 miles)," Mohab Mamish, authority chairman, told a conference in Ismailia, a port city on the canal.
He said the total estimated cost of drilling the new channel would be about $4 billion and be completed in five years, though Sisi said he hoped it would be finished within a more ambitious one-year deadline.