Jakarta, Jan 19 (IANS): Indonesian lawmakers passed a law on the relocation of the nation's capital to the island of Kalimantan, which shares borders with Malaysia and Brunei, from the most populated island of Java.

The move is a step forward in one of the most ambitious projects initiated by the country's President Joko Widodo, Xinhua news agency reported.

Some former presidents had floated ideas of relocating the capital city in the past. The president, widely known as Jokowi, three years ago vowed to relocate the capital city to the province of East Kalimantan due to a number of issues like high population density and land subsidence in Jakarta which is home to more than 10 million people.

Nusantara, which the new capital is called, will be built in two districts in East Kalimantan -- Penajam Paser Utara and Kutai Kartanegara. It is set to occupy about 256,000 hectares of land.

The name of Nusantara, which can be translated as an archipelago in English, was chosen by President Jokowi, Minister for National Development Planning Suharso Monoarfa has said.

Indonesia, the world's fourth most populous country, is home to some 270 million people, consisting of about 17,000 islands.

"The national capital has a central function and serves as a symbol of a country to show the identity of the nation and state," Minister Monoarfa explained during a meeting with lawmakers at the House of Representatives on Tuesday.

The ground-breaking of the construction project that is slated to cost $32 billion was initially expected to be conducted in August 2020, but the Covid pandemic has forced the government to put it on hold.

Some of the projects on the construction of the new capital will be carried out by public-private partnerships, and the early stage of the relocation will begin this year and is expected to end in 2024.

At this stage, the government will build a presidential palace, parliament buildings, and a housing complex in the primary zone. The move of civil servants at the early stage must be completed before August 16, 2024.

Nusantara will serve as the centre of government, while Jakarta would remain the business and economic centre of Indonesia, Southeast Asia's biggest economy.

A day before the lawmakers passed the bill, President Jokowi stressed that that new capital is not only about physically relocating the offices of government institutions, but also "building a new smart city."

It has been reported that Nusantara will be headed by an authority chief appointed by the president and its level of position is equal to a minister.

Several former government officials which will likely become the chief include Jakarta's former governor Basuki Tjahaja Purnama and former minister for research and technology Bambang Brodjonegoro.