The approval came during the weekly Cabinet meeting Wednesday.
The authority will be the owner of lands and state establishments, to be built inside the areas defined in presidential decree no. 330/2015.
The board chairman of the authority will report annually to the prime minister about the authority's activities as well as developments and investments.
Last week, President Abdel Fattah El Sisi ordered the creation of a special economic zone surrounding the Suez Canal, part of a long planned ambitious project to develop the area adjacent to the strategic waterway into an industrial hub.