A network of water transport services connecting all seven Emirates will be set up to ease congestion on the roads.
Routes linking various emirates along the 1,500km UAE's coastline will be introduced in a phased operation that will lead to a complete system by 2020.
The network - which will include the East Coast - will then be connected to regional services.
Various types of passenger transport will be available, including ferries, waterbuses and water-taxis.
Cargo ships will also be able to use the docking facilities that will be built.
The plan is being developed by the Marine Transport Agency of Dubai's Roads and Transport Authority and will be introduced in co-operation with the other emirates.
In a separate move, private marine operators are to be allowed by authorities to carry passengers under the agency's supervision. "The agency is planning to upgrade all water transport services, including passenger, cargo and tourist excursions over the next few years," said CEO Mohammed Obaid Al Mulla.
The agency hopes to tap into the needs of the growing communities living along Dubai's waterfronts and provide commuters with alterna tive ways to beat traffic jams.
At present water transport in Dubai operates only along the Creek, which was used by 27 million passengers between January and October this year.
Al Mulla said the agency hopes to improve water transport infrastructure and increase public awareness to achieve a 10 per cent annual increase in commuters.
Dh2.2 billion will be spent on developing marine transport in and out of Dubai over the next 12 years.
The agency hopes to create a network covering the entire Dubai coastline of 1,000km - including the new island waterfronts being built offshore in the Gulf - by 2010.
There are currently 10 waterbuses carrying passengers on the Creek.
Next year the first phase of the water-taxi service will start operating on the Creek before extending to other areas.
The first phase of the ferry scheme will start operating along the Creek in 2009 and the second phase - covering other parts of Dubai - will become operational the following year.
Al Mulla said private companies will be invited to help improve water transport services in the emirate. Training will be provided to Emiratis to enable them to obtain employment in the growing water transport sector.
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