In what is now the largest contract ever signed by Venezuela outside of those dealing with the oil industry, the country will build a 468km rail line between Cojedes and Anzoategui as part of a $7.5bn joint venture with China.
Venezuela holds a 60% stake in the agreement signed with state-owned China Railways Engineering Corporation.
The rail line will link grain and cattle production in the southwestern Cojedes state with oil fields in the eastern Anzoategui state.
The line will ease and lower costs of cargo transportation within the country, particularly benefiting farmers, as well as workers at the Orinoco oil field.
The line is expected to be complete in 2011.