A controversial artificial cave is to be bored into a "magic" mountain on Fuerteventura, one of the Canary Islands, after authorities decided to go ahead with a project by the late sculptor Eduardo Chillida inside Mount Tindaya despite concerns from environmentalists.

A huge cubic cave, measuring 40 metres (131ft) along each side, is to be dug from inside a mountain that has long been revered by the inhabitants of the dusty, barren island to the south of Lanzarote.

About 64,000 cubic metres of rock will be taken away from the mountain, which rises out of an arid landscape in the north of the island, to create what Chillida called his 'monument to tolerance'.

Chillida's original idea was for visitors to experience the immensity of the space. The roof of the cave will be as high as that of the Turbine Hall at the Tate Modern in London. The floorspace could accommodate half a dozen tennis courts.

"The sculpture has been conceived as a monument to tolerance and a work of art for the Canary people," Chillida wrote before his death in 2002. "I do not want it to be a cause of division or a stone to be thrown in political battles which I do not understand and have no desire to get involved in."

Chillida's widow, Pilar Belzunce, this week signed a contract ceding the intellectual rights of the project so a foundation can be formed to oversee the project.

The president of the Canary Islands, Paulino Rivero, said it would generate "quality tourism". The regional government plans to put the contract for the project out to tender to private bidders. It will allow the winning company to charge visitors for up to 15 years.

The government calculates that if almost half of the visitors to Fuerteventura pay €8 (£6.75) to visit the giant empty cube then the project will cover its costs within 12 years, according to La Opinión de Tenerife newspaper.

Authorities said an outstanding complaint to the courts in the Canary Islands, in which local environmentalists allege the project breaks conservation rules, should not be a problem.

The project has had €25m of public money spent on it, some of which went to buying mining rights, and the local Ben Magez environmental group has warned that it has become mired in corruption.

"We want to remind everyone of the immense historical and ecological value of Mount Tindaya and risks this project brings," the group said.

Campaigners have claimed it will damage not just the environment but also 217 prehistoric rock drawings nearby.

Ben Magez said it wanted to talk to Chillida's family, who closed down his loss-making museum in the northern Basque town of Hernani at the beginning of the year, to dissuade them from carrying out the project.