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MILAN -- Hard hats are about to become the biggest accessory in this capital of fashion.

Faced with the growing competition from China's rapidly expanding fashion industry and Italy's economic challenges, city urban planners and young business leaders are moving forward with an estimated $1.3 billion megacomplex called La Citta della Moda that will serve as a monument to fashion.

The project, which will feature shops, a hotel, an exhibition center for fashion shows, a fashion museum, and a graduate-level fashion university, is expected to ensure Milan's status as a style maker and give the city and Italy an economic boost.

''It has the critical mass to become a new center and is the largest project of its kind in downtown Milan," said Manfredi Catella, managing director of Hines Italia, the development firm promoting the project. ''We hope Bostonians will come to Milan to see a great example of modern excellence in design, architecture, and urban development."

La Citta della Moda, Italian for city of fashion, is the commercial component of the 62-acre Garibaldi-Repubblica project, which will include city council offices, sprawling gardens, and a piazza. Bidding for the construction contracts to build La Citta della Moda will begin in September, with the whole project scheduled for completion in 2010.

Carlo Sangalli, president of the Milan Chamber of Commerce, said La Citta della Moda will give a much-needed boost to Milan tourism, which dropped 20 percent between 2003 and 2004 to just over 5 million visitors. Milan, a city of 1.3 million, is the financial hub for Italy but is overshadowed by other Italian cities such as Venice with its canals and waterfront palaces that attracted more than 12 million tourists in 2004, according to the chambers of commerce for Milan and Venice.

''The City of Fashion will bring a tourism that is connected with the shopping and the top designers and things that are appreciated by our American guests," Sangalli said, adding that the project ''will make Milan more of a global landmark."

Aside from economic benefits, the project's tallest tower, expected to rise 30 stories, is on the verge of altering the city's low-peak skyline and will weave modern buildings into a downtown that is flagged by the Duomo, the city's ancient gothic cathedral.

Milan's posh interior designs and chic couture showrooms are encased by ancient Italian palazzos stained by smog. The site of La Citta della Moda is currently a weed-covered space hemmed by traffic congestion.

A whole neighborhood once existed on the site, but after bombs during World War II fell on Milan, its buildings were demolished. The original owners of the property never rebuilt the land and it was only two years ago that Hines finally persuaded all 12 families to sell, explained Catella.

La Citta della Moda was envisioned by the late designer Nicola Trussardi over a decade ago. The Milanese fashion pioneer presented the city with an idea for a fashion district that would showcase not only the industry's creativity, but all the excellence in design that Italy has to offer. After Trussardi died in a car accident in 1999, his daughter Beatrice took over the firm and has collaborated with one of Italy's biggest development companies, Hines Italia, to carry out her father's initiative.

Beatrice Trussardi, 32, is working with the nonprofit element of the project: the school and the museum. ''La Citta della Moda was conceived as a catalyst for all the companies concerning the fashion world," said Trussardi, vice president of The Citta della Moda Foundation. ''Fashion is only a part of it. It concerns all the Italian excellence and creativity of design."

Catella, who spent two years working at a Chicago real estate development firm, notes that though it is called The City of Fashion and will have over 100,000 square feet for high-end retail, it is not intended as an American-inspired mall.

The aim, he said, is to ''create a stage for Made in Italy and it could be a fantastic new center of Milan that reflects our country and our culture."

Although the complex is intended to be an Italian landmark, an American architectural firm, spearheaded by Argentinian architect Cesar Pelli, will be designing the project and rather than detailing the design with traditional Italian accents, their aim is to make a worldwide statement.

''We have approached this as we have our projects all over the world," said project designer Gregg E. Jones of Cesar Pelli. ''A good design doesn't know borders."

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