Plans to relocate South Sudan's capital from Juba to Ramciel in Lakes State received a boost after Morocco agreed to fund a $5 million feasibility study.
The two countries signed the agreement, among others, on Thursday in Juba.
"The Kingdom of Morocco has taken upon itself the commitment to finance the project worth $5 million dollars and the feasibility study will include areas of socioeconomic development and the environment," the Moroccan Minister of Interior Mohamed Hassad said.
He was in the delegation that accompanied the North African King Mohammed VI in a three-day visit to South Sudan.
The commitment offers a lifeline to the South Sudan government that is broke and ravaged by civil war since December 2013.
Ramciel is a savanna grassland on the west of the River Nile. It is about 250km northwest of the capital Juba. It is considered the central most part of South Sudan.
After South Sudan seceded from Sudan in the north in 2011, the world newest nation's cabinet approved a $10 billion plan to relocate the administrative capital from Juba, in the south of the country, to Ramciel.
Then, the cabinet said that Juba lacked sufficient land for expansion.
However, there have been conflicting views about Ramciel's suitability with a 2006 report noting that the area was swampy and prone to flooding.
Others fear that building a new capital at a time when the country is unstable would be meaningless.
Morocco and South Sudan also signed agreements on education, construction and urban development.