NELIOTA is a new ESA activity launched at the National Observatory of Athens in February 2015 aiming to determine the distribution and frequency of small near-earth objects via lunar monitoring. The objective of this 3.5 year activity is to design, develop and implement a highly automated lunar monitoring system, which will conduct an observing campaign for 2 years, starting in the Summer 2016, in search of NEO impact flashes on the Moon. The project involves: (i) a complete refurbishment of the 40 year old 1.2m Kryoneri telescope of the National Observatory of Athens, (ii) development of a Lunar imager for the prime focus with two fast-frame sCMOS cameras, and (iii) procurement of servers for data processing and storage. Furthermore, we have developed a software system that controls the telescope and the cameras, processes the images and automatically detects lunar flashes. NELIOTA provides a web-based user interface, where the impact events, after their verification and characterization, will be reported and made available to the scientific community and the general public. The novelty of this project is the dedication of a large, 1.2m telescope for lunar monitoring, which is expected to characterize the frequency and distribution of NEOs weighing as little as a few grams.