The scheme is part of the China-Pakistan Economic Corridor (CPEC), an ambitious USD 46 billion investment plan linking western China to the Arabian Sea with infrastructure, energy and transport projects.
Federal Minister for Planning, Development and Reform Ahsan Iqbal will hand over the 43-year lease to the Chinese delegation headed by Vice Chairman of National Development and Reform Commission Wang Xiaodao in Gwadar.
The Chinese Oversees Ports Holding Company Ltd (COPHCL) will manage the affairs of the trade zone.
The Pakistan government has also committed to forming a special security force of between 10,000 and 25,000 men to protect the port in the troubled Baluchistan province where insurgents have in recent years carried out attacks on government and security installations and personnel.
The insurgents fighting for more autonomy have also carried out attacks on Chinese nationals and locals of other provinces.
Under the agreement, the Chinese will execute the port's affairs through its three main companies including Gwadar International Terminal (GIT), Gwadar Marine Services Ltd and Gwadar Freezone Company Ltd.
Federal Minister for shipping and ports Kamran Michal told the media that the government has set aside Rs 26 billion for the Gwadar project.
He termed the Gwadar port as a key project for Pakistan and added it would have significant impact on the economic development of the country.
This port is the deepest of all ports in the Persian Bay, Arabian Sea and the ports in the Bay of Bengal.
Gwadar port was built in 2007 with technical help from Beijing as well as Chinese financial assistance of some USD 248 million.