The Italian government says hosting the America's Cup will provide a monumental investment for the country's south and accelerate redevelopment plans.

Defending champions Team New Zealand chose Naples as the host city for 2027, despite their fierce rivalry with Italian team Luna Rossa.

Prime Minister Giorgia Meloni says the decision recognizes Italy's tradition and passion for the sport.

She declared: "I believe this should make all Italians proud, as it is also a tribute to and recognition of a key part of this nation's identity. Without the sea, we simply would not be what we are. For us, the sea is history, culture and identity."

Naples is a UNESCO city known for its colorful gulf and famous Mount Vesuvius stratovolcano.

Artemis Racing Team compete with their multihulls passing in front of Castel dell'Ovo during the America's Cup World Series regatta in Naples in April 2012. /Alessandro Bianchi/Reuters

Mayor Gaetano Manfredi told CGTN that the world's most prestigious sailing race will be a driving force for the local economy.

Manfredi said: "The qualification of the impact is about €1 billion. The event will boost job opportunities and tourism and it's an occasion for us to improve the infrastructure of the city."

The former industrial zone of Bagnoli will benefit the most, as plans to redevelop the area into the city's new tourism and commercial hub will be accelerated.

Giuliano Cuomo, an expert sailor and member of the yacht club Circolo Canottieri Napoli, says hosting the regatta is a dream come true for the local sailing community.  

"It's amazing the opportunity for our city. If you look at Valencia before and post the America's Cup, it's another place," he told CGTN.

Naples hosted two America's Cup World Series events in 2012 and 2013, but in 2027 it will be the first time the city stages the main event.

The race zone in the Gulf of Naples will be from the city's oldest castle, Castel dell'Ovo to the area of Posillipo.

The event will span two months over the Spring and Summer of 2027 and is expected to attract up to 5 million visitors.

Residents and business owners welcome the influx of tourists and sailing enthusiasts.

Carmine Bianco has been driving taxis in Naples for more than 40 years and told CGTN that the city loves a sporting challenge.

"Surely economically it will benefit the city, as all the big events do, I just hope we're able to rise to the occasion and that Luna Rossa wins!"