The Nigerian government has awarded China Civil Engineering Construction Corporation (CCECC) a $1.49bn contract to modernise its 130km rail line from Lagos to Ibadan.
CCECC will build the Lagos-Ibadan standard gauge rail double track line, which will be one of Nigeria's largest railway projects in recent times, and maintain it for five years.
Work under the project is expected to take 36 months, including the survey and design, the construction and laying 156.65km of track, telephone systems and signalling components.
The project was originally awarded to CCECC in 2006 but could not be completed due to a lack of funds.
The Nigerian government has renewed the project with the Chinese company after re-negotiating and re-phrasing the contract.
Nigerian Information Minister Labaran Maku said the approval of the contract followed a memorandum presented to the government.
"The standard gauge line which the government approved is going to run between Lagos, Ibadan, Ilorin, Minna and Kano," Maku said.
"There would also be a phase that will take off from Minna to Abuja."