Nicaragua's government has unveiled the route of a planned £23.3bn inter-ocean canal that Sandinista officials hope will lift the central American country out of poverty.

While the new waterway – set to rival the Panama canal – has the support of the president, Daniel Ortega, and most Nicaraguans, many legal experts claim it violates the country's national sovereignty. Environmental experts warn construction could cause profound ecological damage by damming rivers, splitting ecosystems and moving untold tons of earth. Others fear the project is not economically feasible.

Representatives of HKND, the China-based consortium set to build the canal and owned by the businessman Wang Jing, said on Monday that the canal will be 173 miles long, 65 miles of which are across Lake Nicaragua.

Junsong Dong, the chief engineer for HKND, said that after studying six possible routes they decided on one that starts in the Pacific Ocean at the mouth of the river, Brito, heads south through the city of Rivas and crosses Lake Nicaragua. From there, it goes by the Tule and Punta Gorda rivers until it reaches the southern Caribbean by Bluefields Bay.

The opposition liberal deputy, Eliseo Núñez, called the announcement "a propaganda game, a media show to continue generating false hopes of future prosperity among Nicaraguans".

But HKND officials said the project will employ about 50,000 people directly, and indirectly benefit another 200,000.

"This project is going to be the biggest built in the history of humanity. It will be an enormous help to the Nicaraguan people and for the world in general, because world trade will require it, we are sure of this," Wang told students at the Managua University of Engineering.

Junsong said the canal project consists of six sub-projects, including the channel itself, construction of two deep-water ports, a free-trade area, tourism projects in San Lorenzo and an airport in the city of Rivas. Construction is expected to begin in December 2014 and is set to take five years.