The Ministry of Water and Irrigation has signed a contract with China Gezhouba Group for the first phase of building of the Sh42 billion Thwake Dam.
The water project, to be located on the border of Kitui and Makueni counties, is being financed jointly by the government and the African Development Bank (AfDB) with the latter footing 35 per cent of the cost.
China Gezhouba won at the tender processing evaluation committee stage after putting in a bid of Sh36.9 billion for the first phase of the multi-billion shilling dam.
The project has been at the centre of controversial tender wars between Water Cabinet Secretary Eugene Wamalwa and his former Principal Secretary Patrick Mwangi.
Mr Wamalwa on Wednesday said most of the land owners whose farms were taken up for the project have been compensated.
The minister stated that upon completion in 56 months, the dam will support 1.3 million residents in Machakos, Makueni and Kitui counties.
Thwake Dam is also expected to produce 20 megawatts of electricity to power the Konza Techno City.
"It is (currently) the largest water project in the country and will also provide water to irrigate 100,000 hectares of land in this region," Mr Wamalwa said.