Indonesia's capital city is to be relocated to the province of East Kalimantan on the island of Borneo, President Joko Widodo has said.
The current capital, Jakarta, home to more than 10 million people, sits on swampy land.
Parts of the city are sinking by as much as 25cm (10in) a year and almost half now sits below sea level.
No name was given for the capital's planned replacement.
The new city will straddle two relatively undeveloped regions, Kutai Kertanegara and Penajam Paser Utara.
In a televised speech, Mr Widodo said: "The location is very strategic - it's in the centre of Indonesia and close to urban areas.
"The burden Jakarta is holding right now is too heavy as the centre of governance, business, finance, trade and services."
He added that the new location was at "minimal" risk of natural disasters.
The ambitious project will cost 466tn rupiah ($32.79bn; £26.73bn) but Jakarta traffic snarl-ups alone cost the economy 100tn rupiah a year, the planning minister says.
There is concern from environmental groups about endangered species in the area. Kalimantan is one of the few places on earth where orangutans live in their natural habitat.
"The government must make sure that the new capital is not built in a conservation or protected area," said Greenpeace Indonesia campaigner Jasmine Putri.
Kalimantan is also a hotspot for forest fires. Indonesia is currently suffering its worst annual fire season since 2015.
There has been a huge programme to decentralise government for the last two decades in a bid to give greater political power and financial resources to municipalities.
Most of the country's wealth is concentrated in Jakarta and many Indonesians living outside Java - the island Jakarta sits on - have long complained about being forgotten.
Indonesia is not the first country to change its capital. Brazil, Pakistan and Nigeria have all changed their capital cities.