Shanghai will construct an isolation facility on an area covering about 14ha on Fuxing Island.
According to Bloomberg, the facility, located in the east of Shanghai’s business district, will have 3,250 beds after completion.
According to a bid document posted on a government tendering platform, China Communications Construction, a state-owned company, was awarded the 1.38 billion yuan ($272 million) project.
Last week, Shanghai and other major Chinese cities boosted COVID tests due to increased COVID infections.
Shanghai, China’s 25 million-person financial hub, has recently stepped up COVID restrictions to combat a rise in cases.
As the authorities attempted to contain the most recent outbreak, several districts confirmed the closure of entertainment venues like bars and cinemas last week.
Over the weekend, while avoiding mentioning the economic toll, the Chinese Communist Party leader defended the zero-tolerance policy in his opening remarks at the once-in-five-year Party Congress.