Chinese e-commerce giant Alibaba Group plans to pour 820 million U.S. dollars into helping build a "smart city" with advanced computing facilities on China's southernmost island province of Hainan.

With Hainan designated to pilot the scheme, Alibaba on Thursday signed an agreement with the administrative committee charged with developing the tourism-focused island toward a mode based on big data and cloud computing.

"Basically, when tourists come to Hainan a few years from now, they need only bring their cell phones with them and they can travel worry-free around the island," said Alibaba chairman Jack Ma.

The smart cities concept was created by IBM. It promotes the use of new technologies to allow users to control objects through cloud computing and boost information sharing and coordination within an urban area.

"Alibaba has developed the world's largest e-commerce platform and largest third-party online payment platform since it was founded 15 years ago. It's also a cloud-counting platform under safe and high-speed operation, which are the basic requirements for building a smart city here," said Ma.

The facility will serve enterprises, cover all the aspects of living, and can also be applied to improve public services, according to the tech chief.

Beside the technical part, Alibaba's investment will also be used to establish an e-commerce college and develop the cultural creativity industry, he said.

China launched a smart city program in 2012, with over 130 cities selected as pilots, as a part of the country's efforts to explore ways to foster a new type of urbanization.

It is expected to generate changes in fields ranging from transportation to the financial sector. With the help of data analysis, for instance, cities will be able to calculate traffic and make rational transportation routes to ease gridlock. Endi