UPDATE 1-Alphabet to develop high-tech site in Toronto - sources

(Adds details on Sidewalk Labs involvement, Google plans)

OTTAWA/TORONTO, Oct 17 (Reuters) - Alphabet Inc, the owner of Google, will announce plans to help develop a section of Toronto's waterfront on Tuesday, in the biggest project disclosed so far by its Sidewalk Labs unit that is using new technologies to develop high-tech urban areas.

Google will be the anchor tenant at the site that Sidewalk Labs - which designs, tests and builds new technologies for "smart cities" - will develop, two sources familiar with the plan said.

Sidewalk Labs won a contract to develop a 12-acre site named Quayside on the waterfront of Lake Ontario in a project funded by Waterfront Toronto, a public agency funded by federal, provincial and city governments.

Canadian Prime Minister Justin Trudeau will announce the agreement in Toronto on Tuesday with Alphabet Chairman Eric Schmidt and Sidewalk Labs chief Dan Doctoroff, one of the sources said.

Sidewalk Lab's website says it wants to develop a "large-scale district that can serve as a living laboratory for urban technology." The unit has teams that work on housing affordability, healthcare for underserved populations and "smart" traffic management.

Google will move some 300 employees in Toronto to the new space, one of the sources said, including a team from its Google Brain unit led by artificial intelligence pioneer Geoffrey Hinton.

The company will continue to boost its engineering operations in the Kitchener-Waterloo area, which is about 90 kilometers (56 miles) west of Toronto.

Sidewalk Lab's has previously worked with Qualcomm Inc and Civiq Smartscapes to retrofit New York City phone booths into digital billboards that serve as WiFi hotspots.

Intersection, the Sidewalk Labs subsidiary behind the effort, recently launched similar kiosks in London. Another division, Flow, has held talks with cities such as Columbus, Ohio, about providing software to evaluate transit programs. (Reporting by Andrea Hopkins in Ottawa and Alastair Sharp in Toronto; Editing by Jim Finkle and Paul Simao)