Developers announced the project on Sunday, saying it would sprawl across 5.1 million square metres and will be set up by the UAE construction firm BENAA and Dubailand.
Described as the Middle East's version of Disneyland, the agreement to set up the Dubai Golf City was signed by Salem bin Dasmal, Chief Executive Officer of Dubailand and Abd Allah Saeed Al Thani, Chairman of BENAA, according to a joint statement.
The project will house five themed courses, a golf academy, a six-star resort hotel and spa, golf villages and retail souks, it said.
"The Dubai Golf City will play an important role in achieving our goal of making Dubailand the worlds leading destination of leisure and entertainment," said bin Dasmal.
In October, property development company Nakheel, whose portfolio includes The Palm and The World man-made islands projects off Dubai coasts, announced plans to build six new golf courses at an estimated cost of 500 to 600 million dirhams (136-163 million dollars).
World sports stars such as Tiger Woods have been taking part in the annual Dubai Desert Classic, the $2.2 million tournament which this year was for the first time jointly sanctioned by the European and Asian tours.
Dubai, a member of the seven-strong United Arab Emirates federation, is in the midst of a construction frenzy, with resorts, malls, sports installations and residential complexes sprouting up across its desert sands.
Dubai, with a population of 1.2 million including more than a million foreigners, hosted 5.4 million visitors last year and has made plans to receive about 15 million a year from 2010.