SINGAPORE (Reuters) - Singapore is set to open the world's largest Ferris wheel in March next year, as part of the city-state's drive to attract more tourists.

At 165 metres (about 541 feet) high, the Singapore Flyer will trump the 160-metre Star of Nanchang in Jiangxi, China and the 135-metre London Eye, and will offer views of Singapore, southern Malaysia and nearby Indonesian islands, its operator said on Thursday.

The Singapore wheel will not be the world's tallest for long, as the same group that will operate the Flyer is building a 208-metre high wheel in Beijing by the summer Olympics in 2008 and plans a 172-metre wheel in Berlin by 2009.

"Since the success of the London Eye, observation wheels are very popular. They are the perfect way to get an overview of a city when you arrive," Florian Bollen, Chairman of the Board of Singapore Flyer, told reporters at a site visit.

Bollen - who also heads AAA Equity Holdings, the main shareholder of the project - told reporters his group is also planning a 120-metre wheel in Orlando, U.S., by 2009 and is negotiating with Delhi and Mumbai about building observation wheels there.

"We are now in active discussion with the authorities in Delhi and Mumbai," said Bollen, 42, a German national.

He said the Singapore Flyer - which cost S$240 million (US$160 million) to build - hopes for at least 2.5 million visitors per year. At an average ticket price of about S$30 ($20), the wheel would generate up to S$75 million per year.

"We will be cash-flow positive from the first year," he said.

Each of the Singapore Flyer's 28 bus-sized capsules will accommodate up to 28 passengers. Each ride will last about 37 minutes and the Flyer will operate 16 hours a day.

Ten of the 16-tonne capsules have already been attached to the 150-metre diameter wheel, and the rest is expected to be attached by early October this year.

But the large shopping and entertainment complex around the wheel will take several more months to complete.

A marketing official for the Flyer said that the firm had already sold about 1.5 million tickets, mostly to tour agents, and the wheel is nearly fully booked for the first three months.

The Flyer is part of a series of initiatives to boost tourist arrivals in Singapore, which hopes to attract 17 million people by 2015 from nearly 10 million in 2006.

The city-state will also host a yearly Formula One race from 2008 and is building two casinos at a total cost of US$7 billion, due to be ready in the next three to four years.