The $550 million contract was signed by Iran's Machine Making Co. and China's largest heavy industry enterprise.
After the completion of the first stage of the joint project Qeshm Island will be able to store 10 million barrels of light, heavy and ultra-heavy crude oil produced in Iran's West Karoun region.
The oil terminal will be large enough to handle tankers up to 140 meters deep and store an estimated 30 million barrels of crude.
In keeping with a 10-year lease contract the terminal will generate an annual revenue of up to $300 million.
Covering an area of 1,491 square kilometers north of the Strait of Hormuz, Qeshm Island is the largest in the Persian Gulf.
Iran also plans to set up a financial center on Qeshm Island as a gateway for foreign banks and other institutions to enter its domestic market, Bloomberg reported on Tuesday.
Several Chinese and Russian banks have already expressed interest in opening offices on the island.