Israel and Jordan signed a “historic” water cooperation agreement Thursday to carry out the “Red-Dead” project, which will supply water for both Israelis and Jordanians and replenish the dwindling Dead Sea.

Calling it “the most significant agreement since the peace treaty with Jordan,” Israeli Energy and Water Resources Minister Silvan Shalom traveled to Jordan to sign the agreement with his Jordanian counterpart, Hazem Nasser, in the presence of US State Department and World Bank officials.

“This is the culmination of a productive cooperation between the nations, that will help restore the Dead Sea, and provide solutions to Jordan’s water problems,” Shalom told Israeli economic outlet TheMarker.

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The “Red-Dead” project, first agreed upon in December 2013, will connect the Red Sea to the Dead Sea via a 200-kilometer-long pipeline that will lead 100 million cubic meters of water up north every year.

A desalination plant will also be erected north of the Jordanian tourist resort of Aqaba, and will serve both Jordan and Israel. The high-salt-content water left over in the desalination process, or brine, will be streamed into the Dead Sea, known for its high salt content.

The agreement will provide a much needed environmental solution for the Dead Sea, an important economic resource to both sides, providing both touristic business and industrial benefits.

Shared by the neighboring nations, it has been rapidly shrinking in recent decades due to diversion of incoming water from the Jordan River, its surface falling 22 meters since 1970.

The sides have also agreed to transfer water from northern Israel to the Jordanian capital of Amman.

The laying of the pipeline, which will be located on the Jordanian side of the border, is expected to cost $250 million, and may be partially funded by the European Union and the World Bank, according to TheMarker.

Construction of the plant is expected to begin in approximately 18 months, and the pipeline will begin to be laid in three years.

A joint Jordanian-Israeli directorate will be established to execute the project.