Taiwanese and Chinese operators last week signed a deal to build the first subsea cable solely linking the island with the mainland.
China Unicom, Taiwan's Chunghwa Telecom and three other Taiwanese operators inked a contract to build a 220km cable between Tamsui and Fuzhou City, AFP reported.
The project, which is expected to be worth around NT$800 million (€20.7 million), will be named TSE-1 and is scheduled for completion by the end of the year, Digitimes said.
China Mobile and China Netcom are expected to sign on to the project at a later date.
The deal still requires final approval from the Taiwanese government, and is a sign of the warming of relations between the two countries since the 2008 election of Taiwan's China-friendly president, Ma Ying-jeou.
But the Taiwanese government faces resistance to its proposal to allow joint telecom investment. Earlier this month opposition party politicians grilled regulator NCC over the security implications.
Chunghwa Telecom and China Unicom have also revealed plans to build a cable between the mainland's Xiamen and Taiwan's Kinmen Island.
When the operators entered extended collaboration talks in November, they said extra capacity between China and Taiwan was needed because cross-strait bandwidth demand was growing at around 20% per year.