The world's first floating city could be constructed off the waters of French Polynesia after the Government signed an agreement with a United States company in San Francisco at the weekend.

Key points: The Seasteading Institute has been searching for a location for five years

The Seasteading Institute has been searching for a location for five years The French Polynesian pilot project will be built in sheltered waters

The French Polynesian pilot project will be built in sheltered waters Floating cities could be a solution to rising sea levels around the Pacific

The Seasteading Institute has been researching the potential for what it describes as permanent, innovative communities floating at sea for the past five years.

After signing a memorandum of understanding with the French Polynesian Government, it is hopeful construction can start by 2019.

The institute's executive director, Randolph Hencken, told Pacific Beat finding a host nation was a significant milestone.

He said the next steps involved economic and environmental impact studies as well as legal investigations to figure out the special governing framework the institute believes is crucial to the ongoing success of its floating communities.

French Polynesia's ministerial representative Jean-Christophe Bouissou (R) signs off on the floating island project with Randolph Hencken from The Seasteading Institute. ( Presidence de la Polynesie francaise. )

The Seasteading Institute was founded by Wayne Gramlich and Patri Friedman in 2008 to establish autonomous, mobile communities on seaborne platforms operating in international waters.

The French Polynesian prototype will not be in international waters but the institute still hopes its vision can be incorporated.

Mr Hencken said the detail of political autonomy needed to be negotiated and considered under the sovereignty of French Polynesia and France, of which French Polynesia is a territory.

"What we're interested in is societal choice and having a location where we can try things that haven't been tried before," Mr Hencken said.

"I don't think it will be that dramatically radical in the first renditions.

"But I imagine it has the opportunity to have different ways of voting for how things are run off the island instead of using the same systems that our great great-grandparents have given us that seem to have failed in so many first-world nations."

Mr Hencken said a former minister from the Government in Papeete approached his company last year and after a site inspection, the azure seas of the Pacific appealed for several reasons.

Sorry, this audio has expired World's first custom-built floating city could rise in French Polynesian waters ( Stephanie Boltje )

"We were looking for sheltered waters — we don't want to be out in the open ocean — it's technologically possible but economically outrageous to afford," he said.

"If we can be behind a reef break, then we can design floating platforms that are sufficient for those waters at an affordable cost."

Other attractions included fewer cyclones, a major airport in Tahiti and other aspects of modern life, like restaurants.

"We don't have to start from scratch as this is a pilot project," he said.

"They also have very stable institutions so we're able to work with a government that wants us there, that we have respect for and they have respect for us."

One of the challenges in the lead-up will be to prove the economic benefit to the Government.

"We are confident there will be both a direct and an indirect benefit for them economically," Mr Hencken said.

"They are a tourist-based economy and they're excited to bring us in because we are a technology-based idea.

"The first islands are going to be a pilot project and there will just be many dozens [of people] to get started with and then … we grow and are more successful, we will hopefully see hundreds and thousands of people living there.

Sorry, this video has expired Beverley O'Connor speaks to The Seasteading Institute's Ashley Blake

"What excites me about the project is a location where people are going to create a community based on interests on floating islands rather than have a community because they happen to be born there and this is their ethnicity."

The agreement with the French Polynesian Government is for the studies to be completed this year and incorporated into draft legislation. If passed by the end of 2018, construction can start in the next year.

A solution to the Pacific's rising sea levels

The Seasteading Institute believes their vision for "sustainable, floating islands and innovative islands" will prove to be part of the solution to rising sea levels.

"So much of the world — places like Kiribati and many of the islands of French Polynesia — are threatened by rising sea levels," Mr Hencken said.

"We are planning to spin off a new industry of floating islands that will allow people to stay tethered to their sovereignty as opposed to having to flee to other countries.

"That's certainly why the Tahitians are interested in us. They want the environmental resiliency as well as the economic opportunities."