An Australian businessman has signed an agreement with China-based CSC Jinling Shipyard to build a cruise ship replica of the Titanic which sank on 15 April, 1912 killing more 1,500 people.

The ship named Titanic II will be the first of four luxury cruise ships Australian businessman Clive Palmer has ordered at the Chinese shipyard.

Clive Palmer told Australian media that Titanic-II will be as luxurious as the original Titanic, but will have 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.

The vessel will be powered by diesel engine and it will have four smoke stacks similar to the coal-powered original Titanic vessel, but they will be for decorative purpose.

Titanic-II will have welding rather than rivets, a bulbous bow to offer fuel efficiency and big rudder and bow thrusters for smooth operation, Palmer said.

In terms of design, the propose cruise ship will be similar to the Belfast-built Titanic which will be built with assistance from a historical research team.

Palmer has not revealed the cost of the vessel, but he said that a new shipping company, Blue Star Line has been set up to operate the vessel.

The new vessel will have 840 rooms on nine decks and will be able to carry around 1,680 passengers.

The Australian businessman said that previous attempt to build such a vessel failed due after failing to raise money and commission a shipyard.