KUALA LUMPUR, Feb 18 (Reuters) - Malaysian sovereign wealth fund 1Malaysia Development Bhd (1MDB) plans to sell 2.4 billion ringgit ($728.49 million) worth of Islamic bonds to finance the relocation of defence units from land marked for government development project Bandar Malaysia.

Bandar Malaysia Sdn Bhd, a unit of 1MDB Real Estate Sdn Bhd, said in a statement to the central bank on Tuesday that it will issue one- to 10-year sukuk by private placement to unnamed buyers.

AmInvestment Bank Bhd is advising on the sale of the sukuk, which will not be rated by credit-rating firms.

The funds raised will be spent on building bases for eight defence units including the police, air force and an artillery regiment.

Army pension fund Lembaga Tabung Angkatan Tentera won a 2.1 billion ringgit contract nearly a year ago to relocate the units from the Bandar Malaysia site.

Bandar Malaysia is a 196-hectare development in the capital city, Kuala Lumpur.

1MDB's last Islamic bond sale was in May 2009 when it sold 5 billion ringgit worth of 30-year bonds.

The sovereign wealth fund, chaired by Prime Minister Najib Razak, is also raising funds to pay off $6.5 billion in debt taken on to buy power plants and a joint venture with Abu Dhabi's Aabar Investments PJS.

Last month, 1MDB said it plans to list the power plant assets this year in an initial public offering worth around $2 billion.

The $6.5 billion debt sale, managed by Goldman Sachs, was the subject of much negative publicity as few details were made public and as it involved huge fees for the U.S. bank, according to Thomson Reuters publication IFR. ($1 = 3.2945 Malaysian ringgit