China will build a train line connecting the Iranian port of Bushehr to the rest of the country's railway network under a $700 million deal signed on Wednesday, Daily Mail reported.

The agreement was inked in Tehran in the presence of Iranian Transport Minister Abbas Akhoundi and officials from China Machinery Industry Construction Group.

It will see the group build a 400-kilometre (250-mile) railway between the Gulf port and the southern city of Shiraz, IRNA state news agency cited officials as saying without specifying when construction would get underway.

This would complete the "North-South Railway Corridor" in line with Iran's goal of becoming a transport hub for goods between the Gulf, the Indian subcontinent, Russia and Central Asia.