Curiosity, the next rover headed for Mars, will land in a crater that shows signs of having been altered by water.

NASA announced Friday that the Gale Crater has been chosen as the landing site for the car-sized rover, also known as the Mars Science Laboratory Rover, in August 2012.

Curiosity is set to launch from Earth late in 2011, equipped with 10 instruments — including one designed and built in Canada — that will take measurements to figure out whether Mars has ever had — or still has — the ability to support microbial life.

The rover will land on a fan-shaped deposit of sediment similar to those found on Earth in areas where fast-flowing streams slow down, such as at the end of a canyon or ravine, or at the foot of a mountain.

"One fascination with Gale is that it's a huge crater sitting in a very low-elevation position on Mars, and we all know that water runs downhill," John Grotzinger, the mission's project scientist at the California Institute of Technology, said in a statement.

The landing site is at the base of a mountain that rises five kilometres high from the middle of the crater, which is 154 kilometres across. Measurements from instruments orbiting Mars show that the bottom of the mountain contains layers of clay and sulphates — materials that form in water.

Certain minerals found in clay and sulphates are good at preserving organic compounds that form the building blocks of life, NASA reported.

However, Michael Meyer, lead scientist for NASA's Mars Exploration program, said finding such organic molecules is still "a long shot."

The crater is located near the equator of Mars, at 4.5 degrees south latitude, 137.4 degrees east longitude.

The announcement of Curiosity's destination on Mars is the culmination of a lengthy evaluation process. Scientists have been looking at 30 potential landing sites for Curiosity since 2006, based on their scientific potential and on safety considerations.

Layers of clays and sulphates, materials that form in water, have been detected at the base of the mountain. NASA