GRAVITY is an adaptive optics assisted Beam Combiner for the second generation VLTI instrumentation. The instrument will provide high-precision narrow-angle astrometry and phase-referenced interferometric imaging in the astronomical K-band for faint objects. We describe the wide range of science that will be tackled with this instrument, highlighting the unique capabilities of the VLTI in combination with GRAVITY. The most prominent goal is to observe highly relativistic motions of matter close to the event horizon of Sgr A*, the massive black hole at center of the Milky Way. We present the preliminary design that fulfils the requirements that follow from the key science drivers: It includes an integrated optics, 4-telescope, dual feed beam combiner operated in a cryogenic vessel; near-infrared wavefrontsensing adaptive optics; fringe-tracking on secondary sources within the field of view of the VLTI and a novel metrology concept. Simulations show that 10 {mu}as astrometry within few minutes is feasible for a source with a magnitude of mK = 15 like Sgr A*, given the availability of suitable phase reference sources (mK = 10). Using the same setup, imaging of mK = 18 stellar sources in the interferometric field of view is possible, assuming a full night of observations and the corresponding UV coverage of the VLTI.