A Sh42 billion Lamu port project contract was signed at State House yesterday.
Lamu county leaders, President Uhuru Kenyatta and Deputy President William Ruto were present.
The project, which involves construction of three berths is part of the Lamu Port-South Sudan-Ethiopia Transport corridor.
The complete project will have 29 berths. The contract was signed by the Kenya Ports Authority and China Communication Construction Company, setting the stage for the construction to start in September.
The signing comes a day after Presidents Uhuru Kenyatta, Yoweri Museven (Uganda) and Salva Kiir (South Sudan) and Ethiopia's Prime Minister Hailemariam Desalgne met at State House, Nairobi, to explore joint financing options for the transport corridor project.
The President said the construction of the three berths will clear the way for participation of the private sector in the construction of the remaining berths and other components of the corridor.
"The signing of this contract for construction of the first three berths is a major milestone in delivering the Lapsset programme and achieving Kenya's Vision 2030," Uhuru said.
He said the government has set aside Sh4.45 billion to compensate affected land owners for construction works to begin. He directed the Ministry of Lands to compensate those affected the soonest possible.
"The Lapsset project encompasses other infrastructure components and facilities, including roads, railway, airports, oil refineries, pipeline, fibre optic cable and high grand falls,"Uhuru said.
"All these components are to be implemented as a package that will result in the development of an integrated transport and economic corridor."
The President said beginning of the construction for the three berths will send a strong message to Kenya's neighbours of the government's commitment to regional trade and integration.
He directed the Ministry of Transport to finalise the inter-governmental agreement for the development and operation of the transport corridor with South Sudan.
Uhuru expressed optimism that Lapsset will provide "the much-needed transport infrastructure" that will result in economic prosperity of Northern and Eastern parts our country.