HONG KONG (REUTERS) - Chinese conglomerate Fosun International is teaming up with South African hotelier and casino king Sol Kerzner's company to build a US$1.5 billion (S$1.88 billion) resort on China's holiday island Hainan, a Kerzner official told Reuters.

The 62-hectare property, which will feature a water park and luxury 1,300 room hotel, will be located in Hainan's southern coastal city Sanya, which authorities are trying to position as an international tourism destination.

Long touted as a place where China could liberalise casino gambling, the balmy island off the country's south coast has attracted scores of international developers in the past two years, including InterContinental, Starwood, and casino operators MGM Resorts and Caesars Entertainment .

Kerzner, which operates the Atlantis casino resort in the Bahamas and Atlantis hotel on Dubai's artificial Palm Island, says the resort in Sanya will not include a casino.

Casino gambling is illegal in China outside of the former Portuguese colony Macau, which is an hour's flight from Hainan by plane.