During the LHC Long Shutdown 3 (2026-29) ALICE is replacing its three innermost tracking layers by a new detector, the “ITS3”. It will be based on newly developed, wafer-scale monolithic active pixel sensors, which are bent into truly cylindrical layers and held in place by light mechanics made from carbon foam. Unprecedented low values of material budget (0.09\% $X_0$ per layer) and proximity to interaction point (19 mm) lead to a factor two improvement in pointing resolutions for particles from very low $p_{\mathrm{T}}$ ($\mathcal{O}(100$ MeV/$c$)), achieving, for example, 20$~\mu$m and 15$~\mu$m in the transversal and longitudinal directions, respectively, for 1 GeV/$c$ particles. After a successful R&D phase 2019-2023, which demonstrated the feasibility of this innovative detector and led to the Technical Design Report (https://cds.cern.ch/record/2890181), the final sensor and mechanics are being developed right now. This contribution reviews the conceptual design and the main R&D achievements, as well as the current activities and road to completion and installation. It includes a projection of the improved physics performance, in particular for heavy-flavor mesons and baryons, as well as for thermal dielectrons that will come into reach with this new detector installed.