NEW YORK — A Coney Island for the new millennium, combining $2.5 billion in private investment with flourishes from its storied past, was unveiled Thursday as the city released its plan to convert the fading beachfront into a world-class, year-round attraction.

The much-awaited proposal includes zoning for business, residential and parkland areas, while ensuring an 11-block stretch along its famous boardwalk will remain "the world's most famous urban amusement park in perpetuity," Mayor Michael Bloomberg said.

That area, which includes the landmark Cyclone roller coaster, the Wonder Wheel and the Astroland amusement park, would be rezoned to allow creation of everything from restaurants and hotels to a skating rink and new amusements, Bloomberg said.

It also would feature installation of a restored B&B Carousel, bought by the city for $1.8 million in 2005.

"We all recognize that Coney Island isn't what it could be," Bloomberg said. "But rather than focus on the faded glory of Coney Island's past, or the unfulfilled potential of its future, let's look at how we can create a better future."

The plan would designate 15 acres as new city parkland in the area around the current amusements, which would mean buying the property from owners such as Thor Equities, which had hoped to construct a $2 billion tourist attraction on the site.

Thor founder Joe Sitt, who spent about $100 million to acquire 10 acres of Coney Island property, was quick to pan the mayor's plan — but held out hope the proposal was etched in sand, not stone.

"We're disappointed by the mayor's presentation but are optimistic that a deal can be reached between the city, the landowners and the community to make Coney Island an even greater place to live and visit," Sitt said.

Sitt, a Brooklyn native, said Thor would continue to work with the Bloomberg administration and other elected officials on the proposal, which still needs to undergo public hearings and would require legislative approval.

Bloomberg predicted the proposal could produce $2.5 billion in private investment in the next decade, along with the creation of 3,000 permanent jobs and 20,000 construction jobs over the next three decades.