The Shanghai Disneyland Project has got state approval, the Shanghai municipal government announced here Wednesday morning.

The government's information office said that talks have started on details of the project, which has been planned in the Pudong New District of Shanghai.

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

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.