China has agreed to invest about $3 billion in developing North Korea's northeastern free trade zone as an export base, a report said on Wednesday.
The deal was probably reached before or just after the North's long-time leader Kim Jong-Il died on December 17 of a heart attack, South Korea's Yonhap news agency said.
China will build an airport, a power plant, a cross-border railway and piers in the North's Rason economic zone bordering China and Russia by 2020, it said.
In return China has secured the right to use the Rason port for 50 years, the agency said, citing sources in Seoul and Beijing.
The port -- formerly known as Rajin and Sonbong -- would give China's northeastern provinces direct access to the Sea of Japan.
Impoverished communist North Korea is striving to revitalise its economy through foreign investment in Rason, which was declared a special economic zone in 1991 but failed to flourish.
China, Pyongyang's sole major ally and biggest trade partner, is actively exploring investment opportunities in North Korea as South Korea's economic influence dwindles amid political tensions.
The North's dependence on Beijing grew as international sanctions over its missile and nuclear programmes restricted access to international credit.
Last June the two countries broke ground for a joint economic zone near the North's west coast, on an island in the estuary of the Yalu border river.