Dubai agreed to a deal on Tuesday with a US startup to "evaluate" the construction of a near-supersonic transport link that could slash travel times to Emirati capital Abu Dhabi to minutes.
The cash-flush city state, which has recently hosted other hi-tech transport pilots, said it would conduct a "feasibility study" with Hyperloop One to sound out the scheme.
The California-based firm hailed Tuesday's "historic" agreement.
"We begin to evaluate the delivery of the world's first hyperloop system across the country," CEO Rob Lloyd told reporters.
"We will initially focus on the value that Hyperloop One will deliver in Dubai and across the (United Arab) Emirates."
The deal will see both parties explore a route for a vacuum-sealed pod transportation system, which could potentially slash travel times between Dubai and Abu Dhabi -- 150 kilometres (90 miles) apart -- to around 12 minutes.
The system could later be expanded to link the UAE with neighbouring Gulf countries so that a trip between Dubai and Saudi capital Riyadh -- currently two hours by plane -- could be completed in under 50 minutes.
Lloyd said his company has also been in talks with transport authorities in Abu Dhabi to discuss the proposal.
While no costs or time-scales were revealed, Lloyd said in a statement that "from a technological point of view, we could have a Hyperloop One system built in the UAE in the next five years."
Mattar al-Tayer, Dubai Road Transport Authority’s director general, told reporters that the cost of building the system will be "an important factor when making such a strategic decision on whether or not we can have hyperloop" in addition to questions over safety and demand.
- 1,200-kph journey -
Hyperloop is a futuristic passenger and freight transport system that promoters say offers the promise of near-supersonic speeds.
Earlier this year, Hyperloop One held a first public test in the desert outside Las Vegas, trying out engine components designed to rocket pods through reduced-pressure tubes at speeds of 1,200 kilometres (750 miles) per hour.
The company says the system offers better safety than passenger jets, lower build and maintenance costs than high-speed trains, and energy usage, per person, that is similar to a bicycle.
Last month, port colossus DP World Group of Dubai announced it was investing in the concept, joining backers including French national rail company SNCF, US industrial conglomerate General Electric and Russian state fund RDIF.
Home to Burj Khalifa, the world's tallest tower where Tuesday's conference took place, Dubai is a leading tourist destination in the Gulf, attracting 14.2 million visitors in 2015.
In September, it unveiled its first driverless bus service, launching a month-long trial period for the electric vehicle with a view to expanding it across the city state.
Hyperloop One, which has so far raised more than $160 million (145 million euros), was set on an idea laid out three years ago by billionaire Elon Musk, the entrepreneur behind electric car company Tesla and private space exploration endeavour SpaceX.