ISLAMABAD (AFP) - Pakistan on Wednesday approved a deal transferring from Singapore to China the management of the strategically located deep-sea Gwadar port on the Arabian Sea.

China provided about 75 per cent of the initial $309 million in funding for the construction of the port in Pakistan's southwestern province of Baluchistan.

It is currently being operated by Singapore's PSA International, but needs further development work to become fully operational.

"The cabinet today gave approval to transfer Gwadar port operations from Port of Singapore to Chinese Overseas Port Holdings Limited," Information Minister Qamar Zaman Kaira told reporters.

"Both the companies have settled their deal," he said, without giving a timetable for the transfer.

Mr Kaira said that Singapore's PSA International could not develop or operate Gwadar "as desired" and said he hoped that under new management the port would soon contribute to Pakistan's flagging economy.

"The Chinese will make more investment to make the project operational," Mr Kaira said.

China, one of Pakistan's closest allies and its main arms supplier, has also funded ports in Sri Lanka and has been approached to help build a port in Bangladesh.

Pakistan's former defence minister Ahmad Mukhtar said in May 2011 that China had agreed to take over port operations at Gwadar.

He also said Islamabad would be "more grateful to the Chinese government if a naval base was being constructed at the site of Gwadar for Pakistan". At the time, China's foreign ministry said it was unaware of any such request.