An agreement to undertake a feasibility study for a 431 km railway linking Mandalay with Muse on the Chinese border was signed by Myanma Railways and China Railway Eryuan Engineering Group on October 22.
The study is to be completed within two years, including environmental and social impact assessments.
The proposed line designed for 160 km/h operation would reduce transport costs, support socio-economic development and contribute to relations with China, Transport & Communication Minister U Thant Zin Maung said during the signing ceremony.
Chinese Ambassador Hong Liang said the project would support China's Belt & Road initiative and the China-Myanmar Economic Corridor, while promoting peace and stability in northern Myanmar.
An existing 313 km metre-gauge line runs from Mandalay to Lashio. In China a standard gauge line is under construction to Ruili, across the border from Muse and around 140 km from Lashio.