Video report by ITV News Swansea Correspondent Dean Thomas-Welch
The new tidal lagoon features underwater turbines which could generate 320 megawatts of renewable energy and is part of a wider Blue Eden project which will include the UK's largest floating solar farm as well as a number of affordable eco homes.
The project is being led by Bridgend-based business DST Innovations and will be based on funding from the private sector.
The Blue Eden project would be developed in three phases over twelve years, starting in 2023 with 1,000 jobs making high tech batteries for energy storage.
This would be followed by a floating solar energy farm in the Queens Dock area and large data centre powered by an uninterruptible source of renewable energy, which would be a UK first.
The heat generated by the servers in the centre would then by used to heat 5,000 new eco-homes along the waterfront.
Tony Miles, Co-founder and chief executive of DST Innovations, said: "Blue Eden is an opportunity to create a template for the world to follow - utilising renewable energy and maximising new technologies and thinking to develop not only a place to live and work, but also to thrive."
It's not the first time plans have been unveiled for a tidal lagoon to be built in Swansea.
Plans first emerged for a tidal lagoon in 2013 with promises it would generate enough energy to power 120,000 homes.
The scheme received planning permission in 2015 but, despite an offer from the Welsh Government to invest £200m, the UK Government scrapped plans for the lagoon in 2018 citing the high cost of the energy produced.
Cllr Rob Stewart, Swansea Council Leader, said: "We are aware now more than ever of the need to develop renewable energy supplies to provide sustainable and affordable electricity to families and businesses.
"Blue Eden will put Swansea and Wales at the cutting-edge of global renewable energy innovation, helping create thousands of well-paid jobs, significantly cut our carbon footprint and further raise Swansea's profile across the world as a place to invest.
"I'm delighted that an international consortium led by a Welsh company has developed our Dragon Energy Island vision into a ground-breaking project that delivers so many benefits and builds on the council's ambition to become a net zero city by 2050.
"This project truly is a game-changer for Swansea, its economy and renewable energy in the UK, and crucially it can be delivered without the need for Government subsidies."