The first phase of a railway project connecting Iran's Astara to the Republic of Azerbaijan's Astara, and its terminal, was inaugurated on Tuesday, at a special ceremony attended by senior officials of both countries.

Addressing the inaugural ceremony on Tuesday, Gilan Governor General, Mustafa Salari, said the project was implemented following an agreement by presidents of both countries.

The republic of Azerbaijan has accepted to provide 50 percent of financial expenses of Rasht – Astara railway project , and a formal agreement in this regard  will be signed on Wednesday in Baku, the Azeri capital.

Mustafa Salari said: "When Astara-Astara railway line gets connected to mainland Europe, this will be a major development in the region and besides transportation; export and import of goods; many new jobs in the fields of packing, distributing and logistic services will be created".

Iran's north-south corridor will become fully operational, after completion of Rasht-Astara railway project.

The special inaugural ceremonies , marking the start of construction of a grain terminal in 60 hectares of land of freight station of Astara railway, were attended by the managing director of Azerbaijan Republic Railways Company , Iran's deputy minister of roads and urban development, and the managing director of Iran Transport Infrastructure and development company.

The two countries agreed in early 2016 to develop economic cooperation through railway links.

The port city of Astara with a population of 91,000 is located west of Gilan province and has a 38 kilometer land border and a 15 kilometer maritime border with the Republic of Azerbaijan.