A billionaire in Australia has announced plans to build an "unsinkable" version of the Titanic, 100 years after the original ship sank after hitting an iceberg.

The Titanic II, announced on Monday, is expected to retrace the steps of its predecessor with a maiden voyage from England to North America in late 2016.

"It is going to be designed so it won't sink", Clive Palmer, a mining and tourism tycoon told reporters.

"It will be designed as a modern ship with all the technology to ensure that doesn't happen."

The original Titanic, then the largest ocean liner in the world, collided with an iceberg on April 15, 1912, leaving a 200 foot gash that exposed the luxury liner's engineering shortcomings - among them, watertight bulkheads that did not span to the top of the ship.

The collision led to the deaths of 1,517 of the 2,202 documented crew and passengers on board the 46,000 tonne vessel.

Palmer said his new shipping company, Blue Star Line Pty Limited, had signed a memorandum of understanding with the Chinese state-owned company CSC Jinling Shipyard to build Titanic II.

The original ship was operated by the White Star Line.

The design work has started for the sequel toTitanic, which will have the same dimensions as its 19.7 metre high predecessor, complete with 840 rooms and nine decks.