Bristol has beaten off competition from around Britain to build the world's fastest car.

The city beat bids from Belfast, Coventry and Farnborough to host the £10-million Bloodhound Project, a rocket-powered car which aims to travel at more than 1,000mph.

And aptly enough, the car will be built next door to Brunel's maritime masterpiece which helped Bristol earn its reputation for engineering innovation and speed – the ss Great Britain.

The famous ship broke the record for the fastest crossing of the Atlantic during its maiden voyage in 1843.

One of the major reasons for the Bloodhound Project is to inspire engineers of the future – in the same way as the iconic Concorde did during the 1970s when it was built at nearby Filton.

Concorde was the first supersonic commercial airliner and could cruise at an average speed of Mach 2 (about 1,330mph).

The new Bloodhound headquarters were being opened today at the Maritime Heritage Centre, Wapping Wharf.

City council deputy leader Simon Cook said: "Bristol is a city renowned for its world-class creativity, design and advanced engineering and it makes perfect sense for the Bloodhound Project to be based here. We are delighted to add Bloodhound SSC (Supersonic Car) to Bristol's credentials and know it will be a massive boost to the city – attracting national and international attention.

"Its location on Bristol's historic harbourside, together with the development of a visitor centre and educational facility, will bring the Bloodhound adventure to the widest possible audience."

Britain has held the world land speed record since RAF fighter pilot Wing Commander Andy Green powered Thrust SSC to 763mph at Black Rock Desert, America, in 1997.

Now he has been chosen to drive this latest car which has been designed to travel faster than a bullet and theoretically cover the distance between Land's End and John O'Groats in just 51 minutes.

The city council, University of the West of England (UWE Bristol) and the ss Great Britain Trust won the bid to build the Bloodhound after Science Minister Lord Drayson and Richard Noble, the former world land speed record breaker, had a vision for a national iconic engineering project to inspire tomorrow's engineers.

They realised that both Concorde and Nasa's space programme in the 1960s to put men on the Moon both led to a crop of bright students turning to engineering to forge their careers.

Britain currently faces an acute shortage of skills for future engineering projects, particularly in environmental projects to combat climate change.

Steve West, vice chancellor of UWE Bristol, said: "Regional employers and schools will benefit enormously from having such an exciting project on their doorstep. Hopefully we will see a few 'Brunels' emerging from the inspiration this project provides.

"This builds on the significant technology, science and engineering traditions of the greater Bristol Region. We are leading the innovation in science and technology as a Science City."

He said they had already seen a 37 per cent increase in their engineering courses and some students were actually working on the design aspects of the car.

For the past two years, a team at UWE led by visiting professor John Piper have been working on the engineering challenges of a car which can travel at speeds of more than 1,000mph.

These same challenges will be presented in classrooms to Bristol pupils to work in real-life problems.

They will also have a chance to view the car while it is being built.

The car will be powered by an EJ200 Eurofighter Typhoon jet engine to take it up to speeds of at least 600mph.

Then it will use a hybrid rocket using hydrogen peroxide fuel to boost it beyond 1,000mph.

The extra thrust created by the rocket forced the team to redesign the Bloodhound so that it would not destabilise at high speeds.

The team scoured the globe to find the perfect run location to make the record attempt, which is expected to be some time in 2012.

They examined 35 deserts before choosing the Verneuk Pan in Northern Cape province, South Africa.

The run site is 10 miles long with one mile of clear run-off at each end and a perfectly flat surface which is firm enough to withstand a 6.5 tonne car travelling at speed.

The project is currently sponsored by 166 firms which will be supplying one-off parts that will be assembled at the Bristol headquarters.

More than 2,400 schools throughout the country have already signed up for the Bloodhound education programme to use the project's learning resources.

Test runs are expected to be held in the spring of 2011 before the car is brought back to Britain for further modifications and a record attempt the following year.

The name Bloodhound was chosen as one of the team was Ron Ayers, the chief aero engineer, who had previously worked on the Bristol Bloodhound ground-to-air missiles which formed part of Britain's air defences from the 1950s for nearly 40 years. The team used "Bloodhound" as a working title and it stuck.