The land of Kárhóll is in the northern part of Iceland, close to the municipality Laugar, and 45 minutes from Akureyri.
The land is around 158ha. it has an apartment house and older outhouses.
Aurora research has been conducted in Iceland for decades with France, Britain and Japan operation research bases.
Gunnlaugur Björnsson from the University of Iceland explained the observatory and its purpose in an interview with the Icelandic National Broadcasting Service, RÚV.
"The purpose is first and foremost to learn more about the interplay between the sun and the magnetic field of the earth and the reaction of the magnetic fields when hit by solar winds. Iceland is very well located for this kind of research as the aurora belt lies over the country."
He also explained what the Aurora Observatory will include.
"At first All-sky Imagers will be inserted, a spectograph and a magnetometer. In the future, it will be possible to insert more tools for research."
He also highlighted the importance of the observatory for the University of Iceland.
"We will gain access to all the data. The equipment is too expansive for us to buy so we welcome this cooperation highly."