The local government has started preliminary plans for the long-awaited Disney theme park in the city, a local official said.

Disney confirmed Tuesday that Shanghai theme park project had been approved by Chinese central government

"China is one of the most dynamic, exciting and important countries in the world, and this approval marks a very significant milestone for the Walt Disney Company in mainland China," said Robert A. Iger, president and CEO of The Walt Disney Co.

Approval of the Project Application Report would enable Disney and its Shanghai partners to move toward a final agreement for construction and operation of the park and begin preliminary development work in Shanghai's Pudong area, the company said in a news release.

The plan includes resettlement of a 4-million-sq-m area in Shanghai's Pudong New Area covering the villages of Zhaohang, Jinjia and Qigan in Chuansha Town, said an official at Zhaohang Village Committee, who declined to reveal his name.

Government officials didn't disclose the use of the expropriated lands, but Shanghai Securities News indicated that the lands in the announcement would be used for the Disney theme park.

"We haven't received any formal notice from the district government on the Disney theme park issue, but we've been gathering information of more than 4,000 residents in the village in recent weeks," the source said.

The government will probably start evaluating residents' houses as early as this December for the Disney project, a villager surnamed Xu said.

Speculation about a Disney theme park in Shanghai has been circulating for years. Earlier media reports said the $3.5 billion theme park will cover an area of 10 sq km, to be located at the east bank of Huangpu River, bordering Pudong district's Chuansha town.

The first phase of the project will be located south of Huanglou region, a 10-minute drive from Shanghai Pudong International Airport. The second and third phases will expand towards the southwest, according to Shanghai Securities News, citing an unidentified expert in urban development research in Shanghai.

Land to be auctioned today in Chuansha for the Disney project is likely to break through 10,000 yuan per sq m, National Business Daily reported, citing Zhao Yuchuan, a manager from real estate agency Fangfang based in Shanghai.

Shanghai Mayor Han Zheng said on Sunday that the city will hold a press conference as early as this week to talk about details of the theme park, without elaborating on whether the park had been approved by the central government.

Upon completion of the final agreement, the project's initial phase would include a Magic Kingdom-style theme park tailored to the Shanghai region, along with other amenities consistent with other Disney parks.

Local media reported last week citing unidentified sources that the visit of United States President Barack Obama to China from Nov 15 to 18 could accelerate the Disney theme park's landing in Shanghai.

Disney said that its first animation was shown in China in the 1930s. Today, Disney's long association with China continues through offices in Beijing, Shanghai and Guangzhou with over 600 employees.

Disney owns and operates five parks around the world, including Disneyland Resort in Anaheim, California; Walt Disney World Resort in Lake Buena Vista, Florida; Tokyo Disney Resort, Urayasu, Chiba, Japan; Disneyland Paris, Marne-la-Valle, France; and Hong Kong Disneyland Resort, located on Lantau Island.