The announcement comes just weeks after the 100th anniversary of the sinking of Titanic, which went down on April 15, 1912 after striking an iceberg on its first voyage, from Southampton to New York.
Palmer said the new ship would be a tribute to the spirit of the men and women who worked on the original, which sank with the loss of 1,514 passengers and crew.
"These people produced work that is still marveled at more than 100 years later and we want that spirit to go on for another 100 years," he said.
Titanic was commissioned by White Star Line and was the largest liner in the world at the time.
Palmer said he has established his own shipping company, Blue Star Line, with the new vessel having the same specifications as its predecessor -- 270 meters long (885 feet), 53 meters high and weighing some 40,000 tons.
It will have 840 rooms and nine decks with design work in conjunction with an historical research team underway. No figure was given on how much it would cost.
The only changes to the original would be below the water line including welding and not riveting, a bulbous bow for greater fuel efficiency, diesel generation and enlarged rudder and bow thrusters for increased maneuverability.