The Mekorot water utility will build and operate the $423 million plant. It will use reverse osmosis to produce 100 million cubic meters of purified sea water a year by 2013.
The ministry said Monday that Israel's five plants will together supply 75% of the country's drinking water by 2013.
Mekorot Chairman Alex Wiznitzer says the plants will allow Israel to restore its natural water resources.
Israel currently gets most of its water from underground reservoirs and the Sea of Galilee. The country has been hit by several years of drought.
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