Chile welcomed its selection Monday to host the world's largest-ever telescope, calling it an important economic achievement and a recognition of the country's importance for the key astronomy project.

"The news is extremely important because it opens the possibility to make a leap in Chile in astronomy research," Foreign Minister Fernando Schmidt was quoted by local press as saying after Chile was selected for Europe's Extremely Large Telescope (ELT).

"This is a recognition of the quality of our territory and the government policies of Chile, under different administrations, which have attracted this type of investment to our country."

The announcement came earlier Monday from the Munich-based European Southern Observatory (ESO), which called the planned facility in Chile's northern desert "the world's biggest eye in the sky."

The ESO, an intergovernmental astronomical research agency, already has three facilities operating in the Atacama desert, including the Very Large Telescope (VLT) in the town of Paranal.

Advocates for Chile argued that its desert was the perfect place because of skies that are cloud-free 320 nights a year.

The region has extremely low humidity and is also free of the storms that lash the Spain's Canary Islands, which had also vied for the telescope.

Chile's government actively lobbied to host the ELT, agreeing to donate a substantial tract of land for the facility.

The ELT is intended to dwarf the VLT. The construction cost is estimated at around one billion euros (1.25 billion dollars) and it is to become operational by 2018.

Morocco, South Africa and Argentina had also competed for the project.