China is to help Pakistan build a new nuclear power plant in the north of the country, the two sides have announced.
The power plant, to be built at Chashma south of Islamabad by 2010, will be for peaceful purposes, a statement said.
It is the second nuclear plant that China has helped Pakistan construct, and comes after a Pakistani scientist confessed to leaking nuclear secrets.
To allay fears, Islamabad is stressing the new plant will follow International Atomic Energy Agency safeguards.
Observers say Tuesday's deal underlines economic ties between the long-time allies, a day after a car bombing killed three Chinese workers in Pakistan's south-west.
Representatives from the Pakistan Atomic Energy Commission and the China National Nuclear Corporation signed the contract, estimated to be worth $600m (£450m).
The new 300-megawatt power station will be located next to a plant the Chinese helped to build in the 1990s, also at Chashma, on the banks of the River Indus.
"It is worth mentioning that Pakistan's nuclear power plants are under the safeguards of the IAEA [International Atomic Energy Agency], which is... responsible for monitoring and safeguarding of nuclear power plants," a statement issued by both parties said.
Pakistan has a parallel nuclear establishment, which runs its nuclear-weapon and missile technology programme.
Khan admitted selling nuclear secrets this year
In February, Pakistan's best-known nuclear scientist shocked the nation on when he went on television and confessed to leaking nuclear secrets to states such as North Korea, Libya and Iran.
Since Islamabad is not a signatory to the Nuclear Non-Proliferation Treaty, its weapons programme is not open to international inspections, says BBC Islamabad correspondent Zaffar Abbas.
Pakistan's first nuclear power plant was built in 1972 in Karachi with Canadian assistance.
Western nations later ceased nuclear co-operation with Islamabad, after it was alleged Pakistan was developing nuclear weapons.
Pakistan conducted nuclear weapons tests in 1998, after its adversary India launched its first nuclear weapon more than a decade earlier.