A subsidiary of Dubai World's investment arm, Istithmar Hotels FZE, will take a 25 percent stake in a joint venture to develop a multibillion-dollar resort on the Strip, a project MGM revealed in June with Kerzner International Holdings Ltd.

MGM will contribute 40 acres of a 78-acre parcel of land it owns, valued at $20 million per acre, for a 50 percent stake, while Kerzner will own the remaining 25 percent of the venture.

The companies have entered into definitive agreements on the deal, they said Tuesday.

MGM Mirage shares rose 75 cents to $83.35.

Kerzner is to lead the planning of the project at the corner of Sahara Avenue and the Las Vegas Strip.

Construction is to begin in the first half of 2009 and the property is expected to open in 2012, said Kerzner International's chief executive, Sol Kerzner, in a statement.

Dubai World said late last month it would invest more than $5 billion in MGM Mirage for a 50 percent stake in its $7.4 billion CityCenter casino megaresort on the Strip and a 9.5 percent stake in the company.

Dubai World is a holding company for the Persian Gulf state of Dubai.

Last month, a Dubai World subsidiary signed an agreement for control of the Barneys New York department store for $942.3 million. A division of Dubai World also spent $100 million this year to buy the QE2, the majestic ocean liner that has carried millions of people across the Atlantic during its 40-year history.