This was decided at a meeting between the Dutch ambassador in Vietnam, Elsbeth Akkerman, experts from that country and city officials on Monday.

A sewer system to cope with high tides, a drainage channel and a multi-purpose rainwater reservoir will be built.

Conference halls, a golf course and amusement venues will be built around the dam to earn revenues.

The construction would be carried out through a private-public partnership, with the private sector building and maintaining anti-flooding structures and the government rolling out policies and mechanisms to help investors secure funds, HCMC's Party Secretary Nguyen Thien Nhan said on Tuesday.

"In the Netherlands, construction of multi-purpose anti-flooding structures involves the private sector. If this project is carried out as planned, [Saigon] would have an anti-flooding structure without the government having to pay too much as it would be supported by other economic activities, which generate incomes," he said.

The project is necessary for the city’s suburbs and would eventually alleviate flooding in 20 years, but more dams are needed in the long run, he added.

Scenes of people wading through flooded streets and motorbikes and cars getting stuck during high tides or heavy rains have been common in Saigon for years.

A major part of the city would lie below sea level in 50 years' time, turning it into a swamp, Laurent Umans, First Secretary of Water and Climate Change at the Dutch Embassy in Hanoi, had said at a meeting last August.

The city has employed a number of measures to combat flooding, including an ongoing anti-flooding project on 100 hectares in Districts 1, 4, 7, 8, Binh Chanh, and Nha Be.

The VND10 trillion ($430 million) work was scheduled for completion in June, but was suspended in April last year after a supervising consultant found that steel from China had been used instead of from G7 countries as stipulated in the contract between the city and a local private contractor.