The interior ministry on Tuesday signed an agreement with the local governments of Busan, Ulsan and South Gyeongsang Province to launch a new European Union-like administrative unit aimed at promoting balanced regional development and invigorating local economies.

The "special union" of the three local governments will officially start operating in January next year, with its council to comprise 27 members -- nine each from the three municipalities -- and the heads of the three governments, to hold the union's rotating presidency.

The "Bu-Ul-Gyeong Special Union" has been pushed for as part of efforts to seek balanced regional development by merging the three municipalities into one big zone that could rival the Seoul metropolitan area in terms of its economy and other functions.

The union is the first of its kind since the central government announced its plan to support joint development projects between local governments in October of last year. (Yonhap)