In a statement, the government said the bond would be launched shortly, and that the proceeds would be used for general budgetary purposes. It did not specify the amount but a benchmark bond issue is at least $500 million.

Banking sources told Reuters last week that Dubai planned to issue up to $1 billion in bonds with a tenor of up to seven years.

The emirate is determined to get a credit rating, a top financial official said on Sunday, but not immediately. Such a rating would help its bond issue find wider investor appeal and revive the local bond market activity, analysts said.

Dubai's last sovereign bond sale was launched last October, barely a month before its flagship conglomerate Dubai World shocked global investors by calling for a standstill on its debt. Dubai World reached an agreement with nearly all creditors earlier this month for its debt plan.

Meanwhile, Dubai World's real estate development unit Limitless is set to delay repayment of a $1.2 billion loan for six months, two sources familiar with the matter said, as the emirate's debt worries drag on.

The delay will allow the company — whose website boasts ambitious plans for a canal in Dubai, a leisure complex in Vietnam and a riverside development outside Moscow — to present a new plan to restructure its debt.

"Limitless has asked for another six-month extension, and they will probably get it. They want the time to come up with the restructuring terms and give banks time to agree," one of the sources said, requesting anonymity.

Limitless declined to comment.

It joins a growing list of entities extending their restructurings in Dubai, including private equity firm Dubai International Capital and real estate group Nakheel.

This is despite Dubai World making headway in its own debt talks and agreeing a restructuring deal for $25 billion of loans at the end of August, paving the way for the emirate's first sovereign debt issue in almost a year.

The extension, which requires unanimous approval of all lenders by Sept. 30, would be the company's second, having already delayed repayment in March.

Though part of the Dubai World group, debt owed by Limitless is being negotiated separately.

Arab National Bank, Emirates Bank International, Emirates Islamic Bank and National Bank of Abu Dhabi were the bookrunners on the $1.2 billion loan from 2008, according to Thomson Reuters LPC data, while Royal Bank of Scotland was among its international lenders.

The company has failed to make great headway in its own restructuring since Dubai World's standstill request plunged the region into turmoil last November, despite only having one major outstanding loan, owed to one syndicate of banks.

The sources attributed these delays to management changes, after Nakheel's board was handed responsibility for Limitless in July.

"The new board wanted to have a fresh look at things at Limitless," said one source. "They will be presenting a new restructuring plan after the extension.

"The main complexity is that it (Limitless) has assets in different countries, and it needs to formulate a strategy for the next four to five years over which projects should go ahead."

Lenders to Limitless did not receive a consent fee in relation to the extension, the same source said.

"The banks don't really have a choice on this matter, and just have to be realistic if they want to recover their money," the person said.