A company backed by tech billionaire Elon Musk has been granted a nearly 49 million US dollar contract to build a transit system using self-driving vehicles underneath the Las Vegas Convention Centre.

The board of directors of the Las Vegas Convention and Visitors Authority approved the contract with The Boring Company, the Musk-backed enterprise based in Hawthorne, California.

The company plans to construct a twin tunnel system running less than a mile long.

The system will use self-driving electric vehicles capable of transporting up to 16 people.

The system also will include three underground stations and a pedestrian tunnel.

Elon Musk
Elon Musk (Brian Lawless/PA)

The company plans to start construction in September and debut the system by December 2020.

The authority will reimburse the company as it completes certain stages of the project.