Nintendo has announced a plan to bring popular video game series Pokemon into the real world, using augmented reality and smartphones to allow wannabe Pokemon masters to catch, train and battle their monsters in real locations.

Called Pokemon Go and powered by GPS, the game allows users to explore their own neighbourhoods and cities to locate Pokemon or other people to battle or trade with on their phones.

An optional peripheral, Pokemon Go Plus, can be worn on the wrist and alerts players when a Pokemon is nearby and has a button to allow catching.

Although the game is not slated for release until next year, a trailer released yesterday has sparked the imaginations of Android and Apple-using fans.

Players will be able to locate and catch Pokemon in real world locations. ( YouTube: The Official Pokemon Channel )

Junichi Masuda, director of the handheld Pokemon games at game studio Game Freak, is contributing to the project, which is being developed by Nintendo, The Pokemon Company, and former internal Google team Niantic.

"The day has finally come when Pokemon appear in the real world," Mr Masuda said at the announcement event.

Niantic's John Hanke said for the first time, Pokemon would "roam free in the real world".

"Pokemon Go will allow players to capture Pokemon who inhabit parks, shopping areas, sidewalks and the countryside all around the world," he said.

"Imagine discovering a Squirtle hiding along the waterfront in San Francisco, a Bulbasaur at Shinjuku Station or a Pikachu beneath the Eiffel Tower.

"This is a wholesome, fun game that can be enjoyed by the entire family and gives everyone a great reason to go outside, get some fresh air, and discover new places.

"Our partnership with The Pokemon Company and Nintendo is an exciting step forward in real-world gaming and using technology to help players discover the world and people around them."

The Pokemon franchise began in 1996 with the original Game Boy games, since selling 260 million copies worldwide, and has since expanded to include trading cards, films, toys and comics.