A multi-million dollar deal to build a 1,700-acre tourist resort on the south east peninsula of the Caribbean island of St Kitts has received the green light from the island states government.

The Whispering Head Resort will have around 250 hotel rooms, a luxury spa, several restaurants, a championship golf course and 750 residential units.

The resort is the brainchild of St Kitts-based Auberge Firesky, which signed the development deal with the local government and will manage the construction of the US$78m (£43m, 62m euros) resort hotel.

Mark Harmon, chief executive of Auberge Firesky, said: We are committed to making St Kitts one of the finest resort destinations and it would be so because of the partnership with the people of St Kitts.

According to Richard Skerritt, St Kitts and Nevis minister of tourism and culture, the resort could return around US$468m (£255m, e371m) to the economy in first and secondary tourism income.

We are very excited about this project, which will not only bring a new level of luxury to St Kitts but also provide a significant contribution to our economy at a time when we are diversifying it away from sugar agriculture and steering it into hospitality services and especially hotel and cruise tourism, he said.

A part of the northern Leeward Islands, the two-island state has a population of 39,000 and now lists tourism as its second most important industry behind sugar.