Chile's state-run mining company Codelco, the world's largest copper miner, signed a deal with Ecuador on Saturday for joint development of the Llurimagua copper project near Quito.
The project could become the first mine Codelco operates abroad following years of efforts to expand internationally as much of the best-quality ore in Chile has already been mined.
"The project will wrap up advanced exploration this year and then feasibility studies will begin," Ecuador's Mines Minister Rebeca Illescas said at Ecuador's embassy in Santiago, where the agreement was signed.
No estimates on the cost for developing the deposit or how much copper it might produce were immediately available.
Ecuador's state-owned miner Enami EP will own a 51 per cent stake in Llurimagua and Codelco 49 per cent.
The project, some 80 km northeast of Ecuador's capital of Quito, has faced resistance from a nearby community for years over fears of environmental pollution.
Reporting by Fabian Cambero Writing by Mitra Taj Editing by James Dalgleish.