Walt Disney Co. said today that it will build a theme park here under a deal that took months to negotiate with Hong Kong officials, who are trying to boost the battered economy and lure more tourists.

Hong Kong's chief executive, Tung Chee-hwa, formally announced the deal, which will put Hong Kong alongside Paris and Tokyo as the only sites of international Disney parks.

Tung said he expects Hong Kong Disneyland to attract 5 million visitors in its first year, creating thousands of jobs and billions in business for Hong Kong, which is struggling to bounce back from a 15-month recession.

This will mark a new era for Hong Kong," Tung said in an announcement. He appeared in Government House, the formal mansion of British colonial governors, surrounded by Mickey Mouse and other Disney characters.

Hong Kong will put up $2.88 billion, Tung said. Disney will initially invest $320 million, according to a Disney vice president, Steve Tight.

Critics have wondered if Hong Kong might be making too many concessions in order to lure Disney, but Tung promised a big boost to the economy.

The park will be a mix of East and West, centered around a traditional Magic Kingdom castle and featuring performances in Cantonese, the local Chinese dialect; Mandarin, which is most commonly spoken in mainland China; and English.

But the formula will be similar to those used in Disney parks elsewhere.

Shanghai, in mainland China, had said earlier that it wanted a Disney park, and Tight said that might be possible at some point as Disney looks to expand in new markets.

"We don't look at this as Hong Kong versus Shanghai," he said. "Clearly there are opportunities for both."

Hong Kong leaders have hoped a Disney park can improve the battered economy, first by creating construction jobs and later by attracting more tourists.

Economists agree Disney would boost the territory's financial outlook, although they say the hype has obscured the fact that it would be far from a cure-all.

The Disney park is expected to add up to $800 million annually to the Hong Kong economy as it is constructed over the next few years--increasing the territory's gross domestic product by about half a percentage point and eventually creating thousands of jobs, said Andy Xie, a Hong Kong economist at Morgan Stanley Dean Witter.

CAPTION: Hong Kong Disneyland is planned for the outlying island of Lantau, the site of the country's new airport. Hong Kong's government is to put up $2.88 billion, while Disney will initially invest $320 million.