Sheikh Mohammed bin Rashid al-Maktoum, who is also Prime Minister and Vice-President of the UAE, made the announcement on Twitter.
The state-linked developers will co-develop the Emaar Beach Front in Dubai and Saadiyat Island in Abu Dhabi, the Dubai Media Office later tweeted.
Emaar Beach Front is a residential artificial island project under development off the coast of Dubai near the palm tree shaped Palm Jumeirah island.
Saadiyat, in Abu Dhabi, hosts branches of the Louvre museum and New York University, and residential and commercial developments.
(Reporting by Alexander Cornwell and Stanley Carvalho; Editing by Saeed Azhar and Alexander Smith)