"The UAE has entered the space race with a project to send an unmanned probe to Mars by 2021 in the Arab world's first mission to another planet," said an Emirati government statement.
It added that a UAE Space Agency is to be created to drive the project.
"We chose the epic challenge of reaching Mars because epic challenges inspire us and motivate us," said the UAE vice president and ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum.
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The statement said UAE investments in space technologies have already topped 20 billion dirhams ($5.44 billion).
The country has Al-Yah Satellite Communications, a satellite data and television broadcast company, mobile satellite communication company Thuraya Satellite Telecommunications, and Earth mapping and observation system Dubai Sat.
The new agency will coordinate the country's space technology sector and supervise the probe mission which will take nine months to make the journey to Mars.
The United Arab Emirates, a seven-emirate federation formed in 1971, will become the ninth country in the world with space programmes to explore the Red Planet, according to the statement.