Dubai is to buy the Queen Elizabeth 2 cruise ship for $100m (£50.5m) and turn it into a floating hotel off the Gulf emirate's man-made islands.
The 70,000-tonne vessel, launched by the Queen in 1967, is to be sold to the Dubai World firm by Carnival, the world's largest cruise operator.
Dubai government-owned real-estate developer Nakheel is building three palm-frond shaped isles off its coast.
The ship will be berthed from 2009 at a pier at the Palm Jumeirah development.
Dubai World, whose investment arm Istithmar has made the purchase.
Istithmar hopes to recreate the QE2's original interior decor and fittings, and to establish a museum charting the ship's history.
Dubai World chairman Sultan Ahmed bin Sulayem said: "Dubai is a maritime nation and we understand the rich heritage of QE2.
"She is coming to a home where she will be cherished."
The ship came into service in 1969 and has crossed the Atlantic more than 800 times, carrying more than 2.5 million passengers, Istithmar said.
Built at the John Brown shipyard on the Clyde in Scotland, the ship was known only as "Job number 736" until she was officially launched by the Queen in September 1967.
The famous liner is 963ft long, 105ft wide and can carry as many as 1,778 passengers and more than 1,000 crew.
Her first captain was Bill Warwick, who took her on her maiden voyage to Las Palmas, setting off on 22 April, 1969.