China has started searching for extraterrestrial life with the 'world's largest telescope' which measures half a kilometre in diameter and cost $180 million.

The Five-hundred-meter Aperture Spherical Telescope, known as FAST, has 4,450-panels and took five years to build.

The telescope requires a radio silence within a five kilometer radius, which meant more than 8,000 people in eight villages had to be relocated from their homes to make way for the giant structure in the southern Guizhou province, state media said.

Researchers said FAST would search for gravitational waves, detect radio emissions from stars and galaxies and listen for signs of intelligent extraterrestrial life.

"The ultimate goal of FAST is to discover the laws of the development of the universe," Qian Lei, an associate researcher with the National Astronomical Observatories of the Chinese Academy of Sciences, told state broadcaster CCTV.

CCTV reported that during a recent test, the telescope received radio signals from a pulsar that was 1,351 light years from Earth.

Earlier this month, China launched the Tiangong 2, its second space station and the latest step in its military-backed program that intends to send a mission to Mars in the coming years.