Work on the first phase of the project will start in 2008 in Khalifa port, while operations are expected to begin in 2010.
The plant will have an initial production capacity of 700,000 tonnes a year, Gulf News, the English language daily newspaper said on Monday.
The first phase is expected to cost $5 billion.
Emal will become "the world's largest single site aluminium smelter" when it reaches its full production capacity of 1.4 million tonnes a year, it said.
Dubal, which is owned by the Dubai government, is the Middle East's largest aluminium producer with a capacity of 761,000 tonnes a year.
In August 2006, it acquired a 25 per cent stake in Canada's Global Alumina Corp for $200 million.
Mubadala owns a majority stake in Dolphin Energy, which is building a regional network to export gas via a submerged pipeline from Qatar to Abu Dhabi, and then on to Dubai, Oman and eventually Pakistan.