Israel's cabinet on Sunday approved plans for a new international airport near the southern resort town of Eilat, Israeli Prime Minister Benjamin Netanyahu said.

Speaking ahead of his weekly cabinet meeting, in which the airport project was approved, Netanyahu said the airport would be located in Timna, northeast of Eilat, in the southern Aravah region of the Negev desert.

"It will be an alternative to Ben-Gurion international airport and serve as an additional international airport for the state of Israel. It will also be an alternative airport for Eilat," he said.

"It will free up considerable land in Eilat, provide a solution for the expansion of Eilat and prevent noise and other pollution in the city."

Israel has three international airports, but most tourists flying into the country arrive at the Ben Gurion airport near Tel Aviv.

The new airport will replace Eilat's current airport, which is located in the centre of the popular tourist destination, as well as the Ovda international airport in the Negev desert nearby.

The project is expected to cost 1.6 billion shekels ($471 million, 328 million euros) and is scheduled to take about three years from the start of work, though it was not clear when construction might begin.

The plans call for the new airport to serve around 1.5 million people a year, the prime minister's office said.

Netanyahu said the new airport was part of ongoing government attempts to improve links between the south of the country, including the Negev, and the more populated centre and north.

"In other words, this is a very important decision," he said.

"It is part of the steps we are taking to change Eilat and the Negev, including laying a railway to Eilat and widening the Aravah road... All of these things are really changing the face of reality in the state of Israel and I think that they attest to the fact that things are changing very rapidly."

The airport is expected to be named after Ilan Ramon, Israel's first astronaut, who was killed in the Columbia space shuttle disaster, and his son Assaf, an Israeli fighter pilot killed in 2009 when his aircraft crashed in Israel.