Egyptian President Abdel-Fattah El-Sisi on Wednesday attended a ceremony marking the official launch of the country's new administrative capital, which will be home to government ministries, residential units and an international airport.

The mega-project, announced in March 2015, is part of the government’s plan to expand urban areas to deal with the country's rapid population growth rate and improve the nation's infrastructure.

Located some 40km to the east of Cairo, the new capital is intended to draw a population of 7 million people in its first phase.

State television showed El-Sisi and top government officials attending a ceremony to mark the launch of the new capital, a project the president said “will go down in history”.

"We haven't been moving in the right direction for seven years," El-Sisi told the audience at the ceremony, in reference to economic and political woes facing the country since the 2011 popular uprising .

He explained that the high-cost for constructing the new capital project has not affected the state's priorities or held up other important projects.

Speaking of the country's need to build new cities, Housing Minister Moustafa Kamal Madbouly said that Egypt's newly built cities are home to 7 million people, making up 20 percent of the urban population.

"We needed to develop a national vision to accommodate the growth in population," Madbouly said in a live-broadcast speech during the ceremony, emphasising that the new capital will be home to "all Egyptians" from all walks of life.

"We need a second and third generation of those new cities to ensure development is done in a planned and right way," he said.

The "sustainable, smart capital" is intended to offer quality of life for Egyptians and change the perception that the low-income population only lives in ramshackle homes in slums, the minister said.

The new capital, built over 714 square kilometres, will be home to a government district housing 29 ministries, and other state institutions, including the cabinet and parliament buildings.

The city will also be home to an international airport, public gardens and parks that total 35 square kilometre (dubbed the Green River) and a residential district offering a total of over 23,000 units. There will be an office park of skyscrapers that will house a 345 metre-long high-rise, the tallest in Africa.

The new capital will offer homes for youth, low-income people as well as high-income brackets across 20 residential neighbourhoods that will accommodate 6.5 million people.

The government has started building 25,000 residential units so far.

A main developer behind the project is the Armed Forces Engineering Authority.

The ministries will start moving to the new city in 2018, with residents expecting to arrive at the same time.

The project is set to be completed in 2020.