By Daina Beth Solomon

MEXICO CITY (Reuters) - Tesla Inc's planned factory in Mexico's northern border state of Nuevo Leon will be built on a site spanning several thousand acres, almost twice the size of its factory site in Texas, with construction slated to start in three months, a Mexican official said on Thursday.

Jesus Nava, the mayor of Santa Catarina in the state of Nuevo Leon, said in an interview that Tesla is purchasing the site from private owners. He said the land spans nearly 4,200 acres in an industrial zone, more than double the size of Mexico City's international airport.

Tesla's factory in Austin, Texas - one of three existing Tesla vehicle plants - sits on 2,500 acres, according to Tesla's website.

Nava said Tesla will reveal what vehicles it will produce at the Nuevo Leon factory when it breaks ground, which it plans to do in three months.

Tesla Chief Executive Elon Musk announced the project on Wednesday, one day after Mexican President Andres Manuel Lopez Obrador said Tesla would build an assembly plant in northern Mexico. Tesla did not immediately respond to a request for comment on Nava's remarks on Thursday.

Tesla will initially spend about $5 billion and hire some 5,000 people, but will ultimately pour a total of $10 billion into the project with up to 10,000 workers, Nava added.

"This will bring a great economic spillover," Nava said, noting that auto industry suppliers have already been expanding their presence in the area, which has ample industrial space.

Mexico's government has said the plant will be the world's largest electric vehicle factory.

The location in the Santa Catarina municipality near Monterrey, one of Mexico's biggest cities, will put production just a few hours south of the U.S.-Mexico border.

A senior Mexican official has said the "gigafactory" will produce about 1 million vehicles a year, which would represent a third of Tesla's global capacity.

Nava said the long-speculated deal in Nuevo Leon state had never been at risk of falling through, even when Lopez Obrador had said he would withhold permits if not enough water was available in the arid region, which last year was hit by severe drought.

"It was never at risk ... it added an extra factor for executives when making a decision," Nava said.

Tesla uses recycled water, and such companies typically use minimal liters of water per second, he added.

(Reporting by Daina Beth Solomon; Editing by Leslie Adler)