The 150-metre-high Buddha Maitreya, or Buddha of the Future, will be installed on a 267-hectare (660-acre) site at Kushinagar, a town on the border with Nepal, where the Buddha died, or attained nirvana, 2,500 years ago.
Cast from bronze, the soaring Buddha will sit on a throne which itself will be a 17-storey building housing a smaller, 12-metre (40ft) statue and a vast prayer hall, shrine rooms and terraced gardens.
The £120m project is the brainchild of the Maitreya Project Trust based in Gorakhpur city and is supported by the state government and a Japanese religious group.
"Kushinagar already attracts many Buddhist pilgrims, but once the project is completed it will become a major international Buddhist centre," said CN Dubey, culture secretary in the Uttar Pradesh government.
Kushinagar's Buddha would have been the largest statue in the world were it not that an even bigger statue, the 169-metre-tall Spirit of Houston, is planned for the American space city. If the Buddha symbolises universal peace, the shimmering chrome Houston statue of a woman in a flowing cape will project the idea of intergalactic friendship.
Colossal representations of the Buddha are a common sight in Asia. The world's tallest stone statue, for instance, is the 67-metre Leshan Buddha in China's Sichuan province. The Bamiyan Buddhas in Afghanistan, destroyed by the Taliban, were 53 metres and 34 metres tall.
India is the birthplace of Buddhism, but today the ancient religion is restricted to a tiny minority in the country. Official support for the Maitreya Buddha project therefore is also motivated by the desire to attract Buddhist tourists from Japan and the west.
A similar project in Bodhgaya in Bihar, where Buddha attained enlightenment, ran into trouble with local villagers objecting to the expense directed at attracting tourists, and had to be abandoned.
Much of Uttar Pradesh is as impoverished as Bihar, so the local reaction to the Buddha Maitreya will become clear as the project gets off the ground.
