The 3.5km railway link from Vientiane to the Thai border will be able to handle freight by 2015, news reports in Laos said Monday.
Laos would build the required facilities at its end of the Lao-Thai Friendship Bridge by 2015, the Vientiane Times reported.
"Construction of a yard to store containers and lifting facilities will begin at the end of this year," said Bounchanh Xaybounheuang, a senior official at the Lao Railways Authority.
The project will be financed by a 1.65 billion baht (US$55 million) loan from the Thai government.
The road and rail bridge was opened in 1994, and links Nong Khai in Thailand to Laos on the other side of the Mekong River. The railway extends another 3.5 kilometres to the Lao capital Vientiane.
The train service has so far been limited to passengers, mainly foreign tourists.
Thailand and Laos plan to double their bilateral trade to $8 billion by the year 2015, compared with $3.9 billion in 2011, the Vientiane Times said.
Laos has also said it plans to invest $7 billion in a freight and passenger rail connection from Kunming, the capital of China's Yunnan province, to Vientiane and on to Thailand.
The project was supposed to start in 2011 but has been delayed.