HANOI, Vietnam (AP) -- The Asian Development Bank has signed a deal to lend Vietnam $1.1 billion to build a highway linking Hanoi with southern China, the most expensive project the bank has ever financed, a state newspaper reported Saturday.

The highway will link Hanoi with the Chinese city of Kunming and is expected to be completed in 2012, the Vietnam News said.

Speaking at Friday's signing ceremony, Vietnam's State Bank Governor Nguyen Van Giau said the project would help stimulate development and reduce poverty in northwestern Vietnam, one of the country's poorest regions.

"The road will help boost trade between Vietnam northern provinces and China's Yunnan province ... and would partly fill the economic and social gap among regions," he was quoted as saying.

Calls to the bank's Hanoi office were not answered Saturday.

In December, ADB officials called the road project the "single biggest project financing in ADB's history."

The 151-mile highway will link Hanoi and the northern province of Lao Cai, which borders the Chinese province of Yunnan.

The highway will be a toll road that is expected to generate enough revenue to pay off the loans within a decade of opening, the ADB has said.

The new road will link companies in Kunming, the capital of Yunnan, to the Vietnamese ports of Hai Phong and Cai Lan.