Egypt is to revive the civilian nuclear power programme it froze 20 years ago following the accident at the Chernobyl plant in Ukraine.
Demand for energy has been growing fast in Egypt
Egypt's energy minister told the state-owned al-Ahram newspaper of plans to build a nuclear power station.
The plant will be constructed at El-Dabaa, on the Mediterranean coast, within the next 10 years.
Demand for electricity has been growing at an average rate of 7% a year and the country faces worsening shortages.
On Thursday, President Hosni Mubarak said Egypt needed to investigate new sources of energy, including the nuclear option.
Energy Minister Hassan Younes said that the project would create a fully functioning nuclear power plant within a decade.
The facility, a 1,000 megawatt nuclear power plant, is expected to cost an estimated US$1.5bn (1.17bn euros). The Cairo government says it will seek foreign investment for the project.
Though it abandoned a serious nuclear energy programme two decades ago, Egypt maintains a small experimental nuclear reactor.
In February 2005 the International Atomic Energy Agency (IAEA) disclosed that it was investigating Egypt's nuclear activities.
It concluded that Egypt had conducted atomic research, but that the research did not aim to develop nuclear weapons and did not include uranium enrichment.
Egypt admitted to failing to disclose the full extent of its nuclear research activities to the UN's watchdog. Officials said the failure arose because of a misunderstanding over exactly what had to be disclosed.
Egypt is a signatory to the Nuclear Non-Proliferation Treaty, which allows countries to build nuclear power stations under international supervision.
It has long pressed for a Middle East free of nuclear weapons.
Israel is the only state in the region with a known nuclear arsenal, though it maintains a position of "ambiguity" on its nuclear weapons, insisting that it will not be the first state to introduce nuclear weapons to the region.
Iran is in dispute with the IAEA and the Security Council over its nuclear programme.
Tehran insists its programme is peaceful, but western states believe Iran secretly wants to develop either a nuclear bomb or the ability to make one. The Security Council is demanding that Tehran halt nuclear enrichment, a step Iran is refusing to comply with.