The start of building work on the Louvre Abu Dhabi represents a major step towards the capital's aim to become a cultural tourism destination.
Experts say the opening of the offshoot of the French museum should also help to cement Saadiyat Island's emerging status as Abu Dhabi's commercial property hotspot.
"This is good news for Abu Dhabi, not only from a tourism perspective but from the perspective of confidence in the Government that planned projects are proceeding per the Abu Dhabi 2030 vision," said Stephen Flanagan, director of professional services at the property consultancy Knight Frank in Abu Dhabi.
"The museum will add to the overall cultural tourism offering and now contracts are awarded it will be a very strong reason to further promote Abu Dhabi as a cultural tourism destination."
Plans were drawn up in 2006 for Saadiyat Island, involving transforming a low-lying spit of land 500 metres off the coast of the capital into a mixed-use development combining hotels, residential property, museums and art galleries.
Saadiyat Island was envisioned as a key tool in the capital's aim to diversify its economy away from hydrocarbons.
But apart from Manarat Al Saadiyat, a gallery and visitors centre, the island's cultural offering is still in its infancy. Much of the development to date has focused on building up hotel capacity in anticipation of influxes of visitors in the future.
Louvre Abu Dhabi should change all that when it opens in 2015. The project will position the emirate as a strong events destination, not just for Arabic culture but global cultures and classic showpieces, said Ian Michael, a professor of marketing at Zayed University in Dubai.
Saadiyat will be an attraction for the growing number of Indian and Chinese tourists who come to the UAE on short visits "for an opportunity to see what they would have to go to Paris otherwise to see", Mr Michael said.
Bolstering Saadiyat's cultural footprint still further, Louvre Abu Dhabi will be followed by Zayed National Museum in 2016 and Guggenheim Abu Dhabi in 2017. The projects should help to stoke higher-end visitor demand for the new hotels on the island, say industry observers.
"Abu Dhabi's supply of hotels is greater than the existing drivers of tourism," said Matthew Green, head of research at CBRE. "If you look at the drivers for future tourism demand in Abu Dhabi, Louvre Abu Dhabi, together with Guggenheim Abu Dhabi will be key."
Mr Green said the development would also be integral to raising confidence in the property market.
"This is good for sentiment and good for supporting the recovery in Abu Dhabi's property market, which is lagging Dubai by 12 to 18 months," he said.