A $3 billion “entertainment zone” is set to be Shanghai’s newest tourist attraction as Dreamworks Animation plans to open the attraction in 2016.

The US film giant’s newly-formed joint venture with China, Oriental DreamWorks, will use the project named Dream Centre to secure its presence in the booming Chinese market.

Proposed for building in the Shanghai's Xuhui district, the Dream Center will include entertainment facilities, animation exhibitions and commercial developments including hotels and shopping.

An announcement posted on DreamWorks' website said the now formally established joint venture has three state-backed Chinese firms together holding a majority 55 per cent stake in the company.

The hugely popular movie Kung Fu Panda will see Oriental Dreamworks make the third installment in the series in China as a co-production for release in 2016.