Bolivian president Evo Morales signed a contract to begin the construction of a new presidential palace that will replace the current colonial building with one inspired by the architecture of the Tiahuanaco civilization of pre-Hispanic Bolivia.

Morales said the new palace will be called the "The Great House of the People" and will be decorated to celebrate the country's indigenous culture and history. The new palace will include a room to celebrate the coca leaf, a center for indigenous ceremonies, and a 1,000-seat auditorium.

The current colonial building has been in use since the 16th century, which according to government spokesman Joan Ramon Quintana, was where "former governments despoiled the Bolivian state of its wealth, its heritage and its memory."

Morales was re-elected with 61 percent of the vote in the country's October 12 election. His Movement Toward Socialism party also won two-thirds control of the country's congress.

The new building is expected to cost about $US36 million.