Danish parliament also approves plans for the development of the up to 1GW Hesselo offshore wind farm.
Denmark has given the green light for the development of two energy islands totalling 5GW by 2030 and the up to 1GW Hesselo offshore wind farm.
The approvals are part of a broader climate agreement signed by the government and a majority of the Danish parliament that also includes the promotion of power-to-X plants.
Danish finance minister Nicolai Wammen said: “With the agreement today, Denmark is again at the forefront with the green transition, and at the same time we are paving the way for a green recovery of the economy with some of the largest long-term infrastructure investment ever.
“We are creating two new energy islands, which means that Denmark is the first country in the world to embark on a whole new era for renewable energy.
“At the same time, we invest significantly in the development of future technologies and take important steps towards a green transformation of the heating sector and industry.
“I am very proud that we have succeeded in making a broad green agreement that will both get us closer to achieving our climate goals and which in the long-term will create thousands of Danish green jobs.”
The agreement also includes plans for more charging stations for electric cars, energy efficiency improvements for industry, green power and more biogas.
Climate Minister Dan Jorgensen said: “With the establishment of the world’s first two energy islands and the world’s largest investment in green fuels, Denmark is taking global climate leadership seriously again.
“We show the rest of the world that climate action and economic recovery go hand in hand. I am very happy with the agreement today and would like to say a big thank you to the parties behind the agreement.”
Wind Denmark chief executive Jan Hylleberg said: “The agreement that the Danish parliament’s parties have just presented is beautiful, ambitious and visionary and responds to many of the proposals that Wind Denmark has highlighted as particularly important for the restart of the Danish economy and for the fulfilment of our climate goals.
“In this way, it is liberating that the parties to the agreement have the courage and willingness to put Denmark back on the world map as one of the most ambitious countries on behalf of the climate, while at the same time creating the agreement across the country and sectors.”
Denmark has set a 70% carbon emissions reduction target by 2030.