Work has begun on what is said to be Europe’s first ever “smart canal” scheme, using the 250-year-old Forth & Clyde Canal.

The £17 million scheme, which is now underway in Glasgow, will use 21st century technology to mitigate flood risk and enable regeneration.

The new digital surface water drainage system will unlock 110 hectares across the north of the city for investment, regeneration and development, paving the way for more than 3,000 new homes.

It will use sensor and predictive weather technology to provide early warning of wet weather before moving excess rainfall from residential and business areas into stretches of the canal where water levels have been lowered by as much as 10cm.

This will create 55,000 cubic metres of extra capacity for floodwater – equivalent to 22 Olympic swimming pools.

Project chiefs said it is the first such initiative in Europe.

The scheme is being delivered through a partnership of Glasgow City Council, Scottish Canals and Scottish Water under the umbrella of the Metropolitan Glasgow Strategic Drainage Partnership.

The project was launched on Wednesday by Glasgow City Council Leader Susan Aitken, Scottish Canals chief executive Catherine Topley and Simon Parsons, director of strategic customer service planning at Scottish Water, who signed a 60-year service agreement.

Ms Aitken said: “This is a fantastic day for Glasgow’s Canal, as we mark the introduction of cutting-edge technology that will both allow surface water in this part of the city to be managed, and allow the building of new homes and businesses on land that historically have been unfit for development.

“It is very exciting to see such smart technology in operation in Glasgow – one of very few examples in the world – and we can look forward to it playing a key role in the continued regeneration of Glasgow’s Canal and the north of the city.”

The project, officially named the North Glasgow Integrated Water Management System, aims to create a so-called “sponge city” – a term used to describe how cities respond to surface water flooding – and will see North Glasgow passively absorb, clean and use rainfall intelligently.

Advanced warning of heavy rainfall will automatically trigger a lowering of the canal water level to create capacity for surface water run-off.

Before periods of heavy rain, canal water will be moved safely through a network of newly created urban spaces – from sustainable urban drainage ponds to granite channels – that absorb and manage water in a controlled way, creating space for surface water run-off.

The scheme will see the Forth & Clyde Canal connected to five new sites over the next 10-15 years, including Sighthill, Hamiltonhill, Ruchill Hospital, Cowlairs and Dundashill.

Ms Topley said: “By unlocking the inherent value of Glasgow’s Canal and diversifying how we use this publicly-owned heritage asset, we are ensuring it continues to deliver for local people 250 years after it was first built.”

Mr Parsons added: “Scottish Water is delighted to be involved in this unique project that enables development in Glasgow and manages flood risk using the canal.”