A Wednesday report said China National Machinery Industry Corp, known as Sinomach, signed a contract worth 5.35 billion yuan with Iran which is on a railway modernization and expansion drive.
Sinomach will handle the engineering, procurement and construction work for the 410 km (255 mile) railway, the company said on its website.
Sanandaj is one of the few remaining provincial capitals in a file in Iran to link with the national railway network.
On Tuesday, President Hassan Rouhani opened a new train line which connectedKermanshah in western Iran with the national railway grid. Officials said the cities of Rasht and Urmia are next to join the network in the coming months, before Ardabil, Sanandaj and Bushehr round up the plan.
PressTV-Rouhani opens strategic rail line near Iraqi border
The railway to Kermanshah in western Iran ended 27 years of anticipation for the mainly-Kurdish city to have an alternative transportation mode.
China Railway Construction in January said one of its units had won a 3.53 billion yuan contract to build the extension of the Kermanshah railway to Khosravi on the Iraqi border.
Iranplans to become a transport hub in the heart of Eurasia where regional countries have drawn up their own development strategies.
On Sunday, Minister of Roads and Urban Development Abbas Akhundi said Iran needed $50 billion of investment for the modernization and expansion of its railway network in the next 10 years.
Chinas flurry of investments in Iran is in line with the Asian giants Belt and Road initiative, a project aiming to build a modern-day Silk Road at a cost of $1 trillion.
PressTV-Iran vows full throttle aid to China's Silk Road
Leaders from 29 countries and ministers and top officials from many others will gather in Beijing for two-day summit starting on Sunday to map out development of the "Belt and Road" initiative.
Beijings biggest transportation project in Iran is worth $1.5 billion to electrify the rail line from Tehran to Mashhad for a length of 926 kilometers. The railway is part of the 3,200-kilometer New Silk Road which goes all the way to Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Urumqi in China.
PressTV-Chinas EXIM inks Iran's $1.5bn high-speed rail deal
EXIMs Vice President Sun Ping and CEO of the Bank for Industry and Mines Ali Ahraf Afkhami signed the documents in Tehran on Tuesday after 16 months of intensive talks.
Earlier this month, a Chinese company signed a deal with Iran's Ministry of Roads and Urban Development to build railway between the cities of Shiraz and Bushehr in the country's south with $700 million of investment.
Chinas CRRC Nanjing Puzhen Rail Transport later signed a contract with Irans IDRO Group to supply 450 metro cars for the Iranian cities of Ahvaz, Tabriz and Shiraz.
Irans rail sector has become a magnet for rail engineering and rolling stock firms from all over the world.
A German consortium has pledged $3.5 billion for rail development projects in Iran, including a new signaling system for the Tehran-Tabriz railroad, new electric and diesel wagons, and high-speed connection lines.
Russias largest rail equipment manufacturer Transmashholding has signed a 2.5 billion euro deal with Iran to set up a joint venture to produce rolling stock. Russian Railways also signed $1 billion euro deal in 2015 to electrify and put up the signaling apparatus on a section of rail line between Garmsar and Gorgan.
PressTV-Russians to finance 1bn rail electrification in Iran
The Islamic Republic of Iran Railways says the bank will finance the electrification of the line between Garmsar and Gorgan.
Italys state rail company Ferrovie dello Stato has signed a $1.37 billion deal to build a high-speed railway between the Iranian cities of Qom and Arak.
PressTV-Italy, Iran sign $1.3 billion high-speed rail deal
Under the deal, Italy's Ferrovie dello Stato will build a rail corridor linking the central cities of Arak and Qom. This is the first of several similar projects by FS in Iran.
Frances Alstom has signed onto a joint venture to set up a factory to construct 1,000 railroad cars in Iran. In 2015, the French architecture firm AREP committed to a $7 million project that would see them revitalize three Iranian railway stations.
PressTV-French firm snaps up Iran railway deal
Frances architectural firm AREP has signed a $7 million deal for redevelopment of three main railway stations in Iran, marking a return of European companies as nuclear negotiations are reaching a climax.
Japan has signed deals with Iran to provide $10 billion in funding for railway related ventures, including two railroads to link together northern and southern Tehran.
