Finnish power company Fennovoima announced Wednesday it would build the country's third nuclear power plant in the western town of Pyhaejoki.

"Fennovoima has chosen Pyhaejoki as the site for its nuclear power plant," the company said in a statement, adding preparatory work there would not begin until the end of 2012 at the earliest.

Fennovoima has asked nuclear contractors Areva of France and Japan's Toshiba for bids to build the plant and said it will choose the contractor in 2012 or 2013.

Fennovoima, a consortium of energy companies including Germany's E.On, is a new player in nuclear energy.

The Pyhaejoki site, situated on the Hanhikivi peninsula on the Bay of Bothnia along Finland's western coast, is around 75 kilometres (47 miles) southwest of the city of Oulu.

It was chosen over another site near the town of Simo, north of Oulu because of its solid bedrock, closer proximity to the sea and fewer permanent residents in the area.

Finland currently has four nuclear reactors at two sites with a fifth, Areva's third generation European Pressurised Reactor (EPR), being built at power company TVO's Olkiluoto site in western Finland.

In 2010, the government gave the green light for Fennovoima and Teollisuuden Voima (TVO) to each build one new nuclear reactor, bringing the total number in the country to seven.

TVO intends to build its newest reactor at Olkiluoto, with the others.

Last year, nuclear power accounted for around a quarter of the country's electricity production.