An accord was sealed on Friday between the Panama Canal Authority (ACP) and the GUPC consortium that has predicted the completion of the project by December 2015.
GUPC, which won the locks contract in 2009 with a US$3.1 billion bid, is led by Spanish construction giant Sacyr Vallehermoso and Italy's Impregilo, each with a 48% stake.
A GUPC source said: “The way has been completely cleared to complete the project.”
ACP administrator Jorge L Quijano said: “What remains now is to continue working with the commitment to complete the expansion, which is currently at a 78% progress.”
The original Memorandum of Understanding was signed in March and embodies the terms of the conceptual agreement.
As part of the conceptual agreement, GUPC will pay US$100 million and ACP would advance US$100 million to continue the project.
The Panama Canal, which was designed in 1904 for ships with a 267m (875ft) length and 28m (92ft) beam, is too small to handle modern ships that are three times as big, making a third set of locks essential.
The additional set of locks is the centrepiece of a US$5.25 billion expansion project.