To be called Yash Raj Films Entertainment District, it will comprise theme park attractions, a movie palace, unique hotel concepts and Indian genre entertainment concepts, according to a DIH statement.
All the components of the entertainment district will be themed around the YRF banner.
'Bringing such a honoured name into the UAE (United Arab Emirates) has been a strategic move as it attracts the core demographic of the country, ' DIH chief executive Samira Abdulrazzak said in the statement.
'Furthermore Indian cinema has an increased general following within the region, as cinema statistics highlight that Bollywood films gross higher than Western films. This will be a one-of-a-kind partnership here in the UAE, which we are very proud to be associated with, ' she added.
The UAE is home to around 1.5 million expatriate Indians.
'Dubai Infinity Holdings is a dynamic investment company and what really counts is that we share a similar vision, ' YRF head Yash Raj Chopra said.
'Dubai has a booming tourism industry and aims to be the most visited destination in the world by 2015. We are happy to be partnering with DIH in making our foothold stronger in the region, ' said the man behind such recent Bollywood hits as 'Veer Zaara', 'Hum Tum', 'Bunty Aur Babli' and 'Chak de India'.
This will be DIH's second project after announcing Isla Moda, which will be the world's first island dedicated to fashion.
The first phase of the Yashraj Entertainment District is scheduled to be completed by 2012.