The "Future of the Fjords" will be the world's first wholly electric vessel without a combustion engine, the environmental organisation Bellona said as it hailed the initiative.
The 42-metre (138-foot) catamaran will be able to transport 400 passengers at a speed of 16 knots, powered by two 300 kW electric motors, its future owner The Fjords said at the Nor-Shipping trade show near Oslo.
Already in the process of being built in a Norwegian shipyard, the ship will be launched between two fjords, including Nærøyfjord which is a UNESCO world heritage site.
A major oil producer, Norway is also at the forefront of electrifying its transport. It's a world leader in terms of electric cars sold per capita, and is expected to launch the world's first 100-percent electric coaster next year.
On Thursday, the Norwegian Shipowners Association unveiled new targets to help reach the goals of the Paris accord on containing global warming: the Norwegian fleet's carbon dioxide emissions are to be halved by 2050 and reduced to zero by 2100, it said.
The Scandinavian country, with strong shipping traditions, launched a first electric ferry in early 2015, the Ampere, which can carry 350 passengers and 120 cars. But the Ampere has a traditional fuel motor that can be used if necessary, unlike the "Future of the Fjords," noted Bellona.
Shipping "is a sector where we can make a lot of savings on fuel thanks to electrification, with hybrid solutions but also with the all-electric solution like the 'Future of the Fjords'," the head of Bellona, Frederic Hauge, told AFP.
"It's clear that the cost of batteries is decreasing. It's expensive today, but it's going down," he stressed.
The Fjords already runs a similar vessel, the "Vision of the Fjords", but it is an electric-diesel hybrid. It was elected ship of the year in 2016 at the international shipping fair in Hamburg.