The project will see the Zurich-based Calatrava rebuild the US city's emblematic Saint Nicholas church, which was destroyed in an attack which saw two airliners fly into the twin towers of the World Trade Center.
The church was completely buried when the WTC south tower collapsed, although no one was inside at the time.
"When I started on the design, I was inspired by (Istanbul's) Hagia Sophia, which for me is the paradigm of all orthodox churches," Calatrava said in a statement.
"Once constructed, the building will a place of prayer, and of peace, love and reconciliation," the architect originally from Spain's Valencia region said.
The building with a budget of $20 million (€15.6 million) is expected to be completed in 2016 or 2017, and will be constructed of white marble. It will also feature LED lighting.
Photo: Santiago Calatrava
This is not the first time Calatrava has undertaken a project at the Ground Zero site: he also designed the new WTC transportation hub.
Calatrava has also designed prestige Spanish projects including Valencia's Palau de les Arts Reina Sofia opera house and cultural centre and the Calatrava Bridge in Barcelona.
However, praise for Calatrava — he has won Spain's prestigious Prince of Asturias Award — has been offset by massive cost overruns and complaints of poor choice of materials.
Residents in the Spanish city of Murcia say his glass-floored Vistabella bridge is dangerous, despite the city authorities laying down a €60,000 carpet to prevent falls.
Some of his other building issues include problems with three bridges in Holland which rusted after a year and a Parliament in the northern Spanish city of Oviedo for which he was forced to pay €3.15 million in compensation after the eaves of the building collapsed .