The Austrian building company Strabag and Bosnia's Srpska Republic (RS) signed a 2.9 billion euro (3.6 billion dollars) contract for the construction of highway network on Monday, local media reported.
The Austrian company has won a 30 year concession to build 397 kilometers of road in RS, the Serb entity within Bosnia, reported dpa.
The deal "is a capital project for the Serb Republic and will enable better communication and economic growth," RS Prime Minister Milorad Dodik said after the signing ceremony.
"This is a very important deal which looks toward Europe and will improve infrastructure and quality of life here, " Strabag director Rudolf Krapf said.
Bosnia is comprised of two autonomous regions - the Serb Republic and the Muslim-Croat federation, both under a weak central government.
The deal, which has been under negotiation since 2006, was accepted by the RS parliament on October 16, despite opposition complaints.