Iran has finalised a cooperation agreement with China which will allow Chinese traders to use Iranian territory for exports to Europe, said a report.

The agreement, which was signed between customs officials of Iran and China, is part of an ambitious Chinese plan to revive the ancient Silk Road and bring it one step closer to reality, added the Iran Daily News report, citing Irna.

Based on the plan, Chinese goods will be shipped to Iran's southern ports and will be thence be transited to Europe overland.

The route that has been envisaged for the scheme will be much shorter than the ancient Silk Road, it said.

The preliminaries for the project were agreed on during Chinese President Xi Jinping's visit to Tehran in January, added the report.