Abu Dhabi National Hotels (ADNH) is developing its first water resort in emirate, the Grand Canal, at a cost of Dh1.5 billion ($408 million) which will be ready by the end of the year, said a report.

The Grand Canal is ADNH's biggest project to date and will boast of a large hotel with 595 rooms and suites, including one hundred villas, surrounded by water channels, the Gulf News reported.

The resort, overlooking the sea coast near the Shaikh Zayed Bin Sultan Al Nahyan mosque, is the first project of its kind spread across the Abu Dhabi beach.

"The resort, being designed on the theme of the Italian city of Venice, will also have 17 restaurants and 20 shops," ADNH chief executive officer Richard Riley was quoted as saying.

According to Riley, the company is set to invest Dh2.8 billion in developing hotels in the emirate."We will open the Park Hyatt Hotel on Saadiyat Island in March 2011, as part of Hyatt Hotels Group," he added.