Tokyo and Moscow have agreed to build a huge oil pipeline from Eastern Siberia to Nakhodka on Russia's Pacific coast, a Japanese government official close to the negotiations said.
Japan and China had proposed competing routes for the pipeline, which is expected to cost $5 billion to $8 billion.
The agreement will mean a route close to that suggested by Japan but with a branch pipeline going to Daqing, site of China's largest oilfield.
"The final destination is fixed," the Japanese government official told Reuters. "The pipeline will definitely go to Nakhodka, and it will have a branch to Daqing."
The official added that Russia was still considering whether to first build the main pipeline to Nakhodka or the branch line to Daqing.
The starting point will be Taishet, some 500 km (300 miles) north-east of where Japan had suggested, which was the city of Angarsk, according to industry officials.
The newly mapped route, taking the pipeline north of Lake Baikal, would help the economic development of north-east Russia and give Moscow control over exports to the United States.