Prime Minister Ramzan Kadyrov, widely seen as the North Caucasus republic's president in waiting, has approved a project to erect a presidential palace, along with quarters to house the provincial cabinet and parliament, on a 30-acre land plot by the Sunzha River in downtown Grozny, the spokesman said.
The compound, which will also include a five-star hotel and recreational facilities, will cost an estimated 1.5 billion rubles ($54 million) to build.
Military operations against rebels in Grozny and other cities across Chechnya have left much of the region in ruins.
Ramzan Kadyrov, son of late Chechen leader Akhmad Kadyrov, strongly opposed last December's parliamentary motion to rename Grozny Akhmad-Kala after his father, assassinated in a rebel bomb blast two years ago. He said that best memorial would be to rebuild the capital, ravaged by a decade of fighting.
