Smotrich --a West Bank settler himself-- said the project would see the construction of 3,401 new houses in the E1 area of the Ma'ale Adumim settlement near Jerusalem.
The project includes the addition of the 'Zibor Midbar' neighborhood, which contains 3,515 new housing units. This is expected to double Ma'ale Adumim's population and attract around 35,000 new settlers in the coming years, The New Arab reported.
Smotrich noted that this project "eliminates the idea of a Palestinian state" and is part of the "de facto sovereignty plan" being implemented by the Israeli regime.
He added that the settlement would link Ma'ale Adumim to Jerusalem and effectively sever the connection between the Palestinian cities of Ramallah and Bethlehem.
Ramallah lies north of Jerusalem, while Bethlehem lies just south of it.
The move comes after a 20-year construction hiatus in the E1 area and despite international criticism demanding a halt to illegal Israeli settlement construction in the West Bank.
Israeli settlements in the West Bank, including East Jerusalem, are illegal under international law, but the Zionist regime has repeatedly ignored this for over 50 years.