Palmer has commissioned Chinese state-owned company CSC Jinling Shipyard to build the luxury cruiser as close to the original Titanic specifications as possible, just with modern technology. It will have the same dimensions as the original Titanic, with 80 rooms and nine decks.
It will be every bit as luxurious as the original Titanic but of course it will have state-of-the-art 21st Century technology and the latest navigation and safety systems, said Palmer in a statement according to BBC.
Construction is set to start at the end of next year.
Palmer said the Titanic II would be a tribute to the men and women who build the original Titanic.
These people produced work that is still marveled at more than 100 years later and we want that spirit to go on for another 100 years, he said according to the Sydney Morning Herald.
The original Titanic, at the time the world's largest cruiser, was built by White Star Line. On its maiden voyage in 1912 it hit an iceberg and sank. It carried 1,500 passengers and crew.
He said the Titanic II will not share the same fate as its predecessor.
Well, of course, it will sink if you put a hole in it, but it's not going to be designed with a hole in. It's going to be designed so it won't sink and it'll be designed as a modern ship with all the latest technology to ensure that that doesn't happen, you know. Of course if you're superstitious, like you are, you never know what could happen, said Palmer to ABC's 'The World Today.'
Palmer said the Titanic II will be powered by diesel but will have four smoke stacks like the original for decorative purposes. It will carry around 1,680 passengers.
A spokesperson for Palmer said the cost of the construction is not yet known. Palmer said other attempts to build it failed because previous companies did not raise enough money for its construction.
Palmer, Australia's fifth richest person, has expanded his empire into tourism with his new company Blue Star Line Pty Ltd. He plans to build a fleet of luxury liners. He already owns a luxury resort on the Sunshine Coast, reported BBC.
The coal mining magnate has strong business relations with China. He said the companies signed a memorandum of understanding to build the luxury liner in China. He has commissioned CSC Jinling Shipyard to build four luxury cruisers altogether.
In a second press conference Monday, Palmer said he will be entering into politics.
Palmer will run as a Liberal National Party candidate, gunning for the Brisbane electorate of Lilley, which is held by Australia's Treasurer Wayne Swan.
I've done this because the Treasurer and myself both have clear different visions of where this country should go and what we should do. I believe we should be getting bigger and stronger, creating more wealth for our people, so that we've got more money to distribute to the things that need to be done in this country, said Palmer to ABC's 'The World Today.'
Palmer ran for the Sunshine Coast seat in Fisher in 1984. He lost by one vote to speaker Peter Slipper.