The cabinet will be asked next Tuesday to approve a Chinese loan deal to develop dual tracks on the Nong Khai-Map Ta Phut railway route.
Transport Minister Prajin Juntong said ministers are being asked to endorse the scheme after Prime Minister Prayut Chan-o-cha and his Chinese counterpart Li Keqiang reached an agreement in bilateral talks at the Apec Summit in China.
China will invest in building 867 kilometres of dual tracks on the route.
ACM Prajin said he will set up and lead a working panel to thrash out the rail project details.
The panel's conclusions will then be submitted to the National Legislative Assembly for approval before Thailand and China sign a Memorandum of Understanding (MoU) on the scheme.
According to the transport minister, the MoU is expected to be signed next month so that a study into the design of the tracks can be conducted early next year.
The construction is tentatively scheduled to begin in 2016.
He said the Nong Khai-Map Ta Phut rail route is divided into three sections. They are Nong Khai-Nakhon Ratchasima-Kaeng Khoi; Kaeng Khoi-Bangkok; and Kaeng Khoi-Chon Buri-Map Ta Phut.
"The rail project will be developed through a government-to-government contract," he said. "It will be a double-track route using 1.435-metre standard-gauge that serves trains at speeds of 160-180kph."
ACM Prajin said the railway development project is part of Chinese and Thai efforts to build a strategic network and boost the regional economy.
The project will also help China revive the "Silk Road" trading route while boosting transport links for Thailand and Asean, he said.
Experts say the proposed dual tracks would be a major step forward in achieving comprehensive overland transport for the region.
The transport minister said the exact arrangements for the investment deal are yet to be finalised, but the pact is likely to involve China paying for the tracks, while Thailand operates the services and later repays the cost to China.
He said the investment costs of the rail project are estimated to be about 400 billion baht.
"We haven't decided on the mode of investment or investment ratios between China and Thailand," he said.
"China may invest 85% while the remainder may come from Thailand, or China may invest 100%. However, I can assure everyone that it will be a joint investment."
He denied earlier media reports that Thailand may repay China for the deal using rubber or rice.
"There will be no agricultural products involved," he said.
"Farm products are under the jurisdiction of the Agriculture Ministry."
ACM Prajin added that Thailand can expect to get some good news next month when Gen Prayut makes an official visit to Japan.
He said the prime minister is due to discuss the water management scheme and infrastructure development projects with Japanese authorities.
He invited all countries to invest in Thailand, saying the Transport Ministry has a number of large, budget-intensive projects to pursue.