The Hong Kong Airport Authority and Hangzhou Xiaoshan International Airport in east China's Zhejiang Province have formed a joint venture that will operate and manage the Chinese mainland airport.

According to a government press release on Friday, the Hong Kong airport authority will invest 1.9 billion (243 million US dollars) to hold a 35 percent stake in the airport.

Hangzhou Xiaoshan International Airport will be converted from a state-owned limited company to a limited liability joint venture.

The State-owned Assets Supervision and Administration Commission confirmed its net appraised assets -- which it contributed to the new company -- give Zhejiang parties a 65 percent equity stake.

The two parties will jointly operate and manage Hangzhou Airport, aiming to enhance operation efficiency, service quality and management standards to bring it to world-class standards.

"This is a win-win agreement for both parties," Xiaoshan International Airport Chairman Chen Haimei said.

The authority's Chief Executive Officer David Pang said, " Through direct investment and participation in their management, we will establish an airport system with our Chinese mainland counterparts. This will enhance the economic development of the member airports and their respective economic regions."

Airport Authority Chairman Victor Fung added that the alliance "will allow the two airports to further develop and enhance business cooperation of the two regions."