The observatory will scan the entire sky every three nights (Image: Large Synoptic Survey Telescope)

The 8.4m (28ft) Large Synoptic Survey Telescope (LSST) will be 50 times as powerful as other survey telescopes.

The observatory will be able to produce colour movies of objects that change or move on rapid timescales.

It will join the existing Cerro Tololo Inter-American Observatory, on Cerro Pachon, a 2,640m (8,800ft) mountain peak in northern Chile.

The LSST should be under construction by 2009 with a planned completion date in 2012.

LSST project manager Donald Sweeney said the LSST would be able to map the visible sky rapidly and continuously, providing a new way to observe the Universe.

The observations will focus on astronomy and fundamental physics, including studies in dark matter and dark energy to understand why the Universe is expanding at an accelerating rate.

The decision to place the LSST on Cerro Pachon followed a two-year period of testing and analysis of the atmospheric conditions and quality of astronomical "seeing" at four sites in Chile, Mexico, and the Canary Islands.

The project is led by a consortium based in Tucson, US, formed by the University of Arizona, the Research Corporation, the National Optical Astronomy Observatory and the University of Washington.