Nicaragua has approved the proposed route for a $40bn waterway linking the Pacific and Atlantic oceans, a landmark project that will lock horns with the 100-year-old Panama Canal when completed.

A committee of government officials, businessmen and academics has approved the 172 mile (278 km) route, from the mouth of the Brito River on the Pacific side to the Punto Gorda River on the Atlantic side.

The shipping channel could lift the Central American country out of poverty.

The proposed channel will be over three times longer than the 48-mile (77-km) Panama Canal, which is located further down south at the narrowest part of the Central American isthmus.

The route was proposed by HK Nicaragua Canal Development Investment (HKND Group).

Hong Kong-based HKND group is leading the project. HKND is headed by Chinese lawyer Wang Jing, who also runs the Chinese firm Xinwei Telecom Enterprise Group.

Lake Nicaragua

The proposed Nicaragua canal will pass through Lake Nicaragua, Central America's largest lake, and stretch between 230 metres and 520 metres (755 feet to 1,706 feet) wide and 27.6 metres (90 feet) deep, said HKND engineer Dong Yunsong.

The plan is to complete construction by 2019 and begin operations in 2020, committee member Telemaco Talavera said, reported Reuters.

The proposed route faces environmental and social impact studies that could suggest some changes to the plan, but the studies should be completed later in 2014, to allow work to kick off by December, Talavera added.

The Panama Canal is nearing the end of a $5.25bn (£3.1bn, €3.9bn) expansion project, with the improved canal slated to open in early 2016.