The Minister of Fisheries, Matai Seremaiah, described the agreement as the result of tough negotiations with the Chinese.
The Daily Post newspaper reported the money would be used by the SinoVan Company to upgrade the plant to the point where it can go into operation.
The plant was built 14 years ago but had not been able to operate because there had not been a suitable wharf.
Our correspondent said the Vanuatu Government was now planning to build the wharf.
The Minister wants to see all tuna caught by Vanuatu registered fishing vessels and Vanuatu-flagged vessels offload all their catches at the plant instead of in Fiji.