The plant on the Jinsha river will have 12.6 gigawatts of installed capacity when it is up and running - compared with a projected 22.4 gigawatts at the Three Gorges Dam, the world's largest hydroelectricity project.

Xinhua did not say when the plant would start generation.

China is trying to boost the portion of its energy that comes from renewable sources, which it says includes massive dams, to cut reliance on dirty-burning coal and imported oil.

But some environmentalists do not believe large hydropower projects should be grouped with technologies like solar power or wind turbines because of their impact on river systems.

Earlier this year the State Environmental Protection Administration (SEPA) told the state-owned Yangtze River Three Gorges Project Development Corp. it must heed an order to halt construction at three new projects - including Xiluodu - or face fines and legal penalties.

Pan Yue, the vice director of SEPA, was quoted saying "Construction of these projects has started without approval of the assessment of their environmental impact...They are typical illegal projects of construction first, approval next."

Xinhua's report did not say whether SEPA had lifted its objections to the Xiluodu dam.

The project is part of the country's West-East power transmission project, which aims to take electricity from poor areas suited to dams to the booming but power-short coastal regions. It will bring in an annual 300 million yuan for the region when completed, Xinhua said.

Hydropower stations account for around a quarter of China's installed capacity but last year provided just 15 percent of its power because of low water levels.