Custodian of the Two Holy Mosques King Fahd bin Abdul-Aziz has approved the construction of a $533 million project on a hill close to the Grand Mosque in Makkah.

The project includes 11 high-rise residential towers consisting of 942 apartments, and a twin-tower five-star hotel with 1,200 rooms, the Arab News reported.

It also involves reconstruction of the 350-year-old Ajyad Fortress and the Bulbul mountain on which it stands.

The project is under the Ministry of Islamic Affairs and Endowments and the contractor is the Saudi Binladin Group.

King Fahd instructed that the 23,000-sq-m castle should be preserved in full by rebuilding it.

Municipality officials said the towers would be built in areas surrounding the castle after its reconstruction.

Meanwhile, the newly-founded Makkah International Company for Development (MICD) is to invest SR580 million ($155 million) in real estate business in the holy city.

MICD is to construct five huge residential facilities in the Haram precincts and work on the project was scheduled to start last month.