The Chinese government will help Israel build an extension of its railway from Nahal Tzin to the southern city of Eilat.
A memorandum of understanding is soon to be signed between the two governments after the deal was closed recently during a visit to Beijing by Transportation Minister Yisrael Katz, who met with his Chinese counterpart to discuss the project.
The 180-kilometer (112 mile) route is expected to expand tourism to the Red Sea resort town.
Other transporation projects are also on the drawing board to be developed with the assistance of China, which has become one of the world's great powers in this area over the past several years.
Israel's five-year plan for transporation infrastructure currently includes a budget of some NIS 100 billion. Among the projects listed in that plan is a new network of roads and railway routes.
China, which built Haifa's Carmel Tunnels, has been tapped to develop the city's Haifa-Carmiel railway as well.
The Asian nation is also expected to play a significant role in developing other elements of the Jewish state's national railway and highway system.