The property, reportedly costing 10 million pound, is being built in Crete where the 'Born This Way' star bought land last year, reported Contactmusic.
"It's going to be absolutely phenomenal when she's finished with it," a source said.
The 26-year-old is also planning to have a palace and a church on the European land.
"It's right on the water and appears to be floating... Besides the palace and church, the project will also include a tennis court and two pools. It has ended up costing over 10m pound for the whole development and that's only so far. Extra costs are sure to mount up," the insider added.
It was rumored that Gaga was considering getting married to her then boyfriend, Luc Carl, on the Greek island.
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