Moscow has grown almost 2.5 times in size overnight on Sunday as the city’s limits were pushed out 50 kilometres southwest in an effort to ease horrendous traffic jams, improve living conditions and make the Russian capital a more attractive place for foreign investors and financiers.

The ambitious “Greater Moscow” plan proposed by then President Dmitry Medvedev a year ago came into effect on July 1, increasing the city area from 1,070 square kilometres to 2,550 square kilometres. This will push Moscow up from the 34th spot among the world biggest capitals in terms of area to the 7th spot.

The last major expansion of Moscow’s boundaries happened 50 years ago, when the city’s population was 6 million. The figure has since almost doubled to 11.6 million, and the city has hit the limit of growth once again.

Moscow is one of the most densely populated cities in Europe, with close to 11,000 people per square kilometre (which is more than in Delhi, but far less than in Mumbai or Chennai). The area now added to the city has a mere 232,000 residents.

A detailed development plan for the new territory is yet to be compiled, but the approved concept calls for relocating many government institutions, currently scattered across congested central Moscow, to the suburbs where housing will be built for 2 million people and 1 million new jobs will be created by the year 2020.

Officials said the first government offices may move out within next five years. The city government is now conducting an international contest of development projects for expanded Moscow. The cost of building the transportation infrastructure alone in the new territories is expected to run into more than $30 billion. The city government hopes to recoup part of the costs by selling off property vacated in the upscale downtown.