Israel, Jordan and the Palestinian Authority have signed a water sharing pact aimed at one day replenishing the rapidly drying Dead Sea.
The agreement will build a pipeline to carry brine from a desalination plant at the Red Sea to the Dead Sea, while providing drinking water to the region.
The Dead Sea is dropping by as much as 1m (3.3ft) a year as the River Jordan is depleted for use in irrigation.
But critics fear the plan`s impact on the Dead Sea`s fragile ecosystem.
Such a project has been under discussion for years.
With peace talks between Israel and the Palestinians apparently stagnating, it offers the prospect of successful co-operation at a time of political difficulty, says the BBC`s Kevin Connolly in Jerusalem.
The agreement was signed on Monday at the headquarters of the World Bank in Washington DC. The project is expected to cost $250m-$400m (£152m-£244m).
Call for study
The Dead Sea is so rich in salt and other minerals that humans float naturally on the surface. The area around the sea has an established tourism and health industry because of the water`s unique properties.
But the Dead Sea is losing water rapidly, with some fearing the Dead Sea could dry up entirely by 2050.
The scheme will pipe water from the Gulf of Aqaba off the Red Sea through a desalination plant in Jordan, sending brine to the southern-most edge of the Dead Sea.
The brine will be used to test the impact of Red Sea water being transported to the Dead Sea, according to World Bank officials.
It will involve the construction of a desalination plant in Jordan, projected to yield 80 million-100 million cu m of water annually. A water transfer deal will also see Israel supply water to Jordan and the Palestinian territories.
The project will also yield hydroelectric power for use in the desalination process.
Environmental advocacy group Friends of the Earth Middle East has called for an environmental study of how the brine from the desalination plant should be treated before the project begins in earnest, arguing it is unclear how brine from the Red Sea water will affect the Dead Sea`s ecosystem.
The agreement was signed by Israeli Energy Minister Silvan Shalom, Shaddad Attili, head of the Palestinian water authority, and Hazim el-Naser, head of the Jordanian water ministry.
