The MEGAPIE project was started to design, build and operate a liquid metal spallation neutron target as a key experiment on the road to an experimental accelerator-driven system and to improve the neutron flux at the PSI spallation source. The design of the target system has now been completed and manufacturing has started. The target is designed for a beam power of 1 MW and 6 Ah of accumulated current. It will contain about 88 l of LBE serving as target material and primary heat removal fluid. The heat will be removed by forced convection using an in-line electromagnetic pump with a 4 l/sec capacity. The heat will be evacuated from the target through 12 mono-wall cooling pins via an intermediate oil and a water cooling loop. The beam window made of the martensitic steel T91 will be cooled by a jet of cold LBE extracted at the heat exchanger exit by a second EM pump from the LBE main stream. A preliminary safety analysis has been performed considering normal, off-normal and accident conditions and a corresponding report has been submitted to authorities for licensing. The experience gained up to now shows that MEGAPIE may well be the first liquid metal target to be irradiated under high-power beam conditions.