The theme park will be built in southwest China's Sichuan province, 1,500 km from the nearest ocean and the simulation technology will allow several hundred people at a time to feel what the shipwreck was like.
The privately-owned Sichuan Seven Star Energy Investment Group announced in Hong Kong that it had hired a US firm to provide designs based on the Titanic's sister ship, RMS Olympic.
The ambitious project was part of a plan to build a world-class tourist destination in the little-known rural county of Daying in the Sichuan Province, the company said, adding that the ship would be docked permanently on the bank of the Qi River, which runs across the county.
Curtis Schnell, a Hollywood production designer working on the design of the ship, was quoted as saying that the design team would rely on the Olympic's existing blueprints and salvaged furniture that was used on board for their designs of the new ship.
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Su Shaojun, chief executive of the Seven Star Energy Investment Group that is funding the project, said, "When the ship hits the iceberg, it will shake, it will tumble. We will let people experience water coming in by using sound and light effects."
"They will think 'The water will drown me, I must escape with my life'," Su was quoted as saying by the Mirror.
Backers of the project have denied that the idea is insensitive to the 1,517 people who lost their lives in the disaster, which was depicted in the 1997 blockbuster starring Leonardo DiCaprio and Kate Winslet.
Su, said, "We think it's worth spreading the spirit of the Titanic.