Work has begun on the Diana, Princess of Wales Memorial Fountain, almost six years after her death.
The fountain will cost £3m
The final design for the permanent memorial, being built next to the Serpentine in Hyde Park, London, was chosen to reflect the life of the Princess.
The structure, designed by American architect Kathryn Gustafson, is based on a large oval stone ring.
The memorial is due to be completed in summer 2004.
The £3 million design involves water pouring into the structure from the top of a hill at the Serpentine Bridge and running down in two directions.
In one direction it forms a tight, fast-flowing torrent, creating water jets.
In the opposite direction it forms a dish that "rocks and rolls" water through a more slower incline.
Both end in a pool in a dished hollow. At night the shape, which can be planted with plants and trees, will be lit up.
The water will be shallow enough for children to paddle and play in and spectators will be able to touch the water.
Work on the fountain involves craftsmen and production techniques, previously used in the space industry.
An original clay model was built by Gustafson, which was then digitally scanned to create a three-dimensional computer file - the first time computer modelling had been used for architectural purposes.
Gustafson said: "The ability to affect those with whom one comes into contact, while being affected by those around one - these were both attributes associated with Princess Diana.
"We have endeavoured to create a water feature that can be associated with these features."