Ground was broken on Saturday in Beijing for the construction of part of the south-to-north water diversion project.
Work on the huge water pipe, the last part of the Beijing-Shijiazhuang section, began along the western section of the Fourth Ring Road.
The road is one of the main traffic arteries surrounding Beijing.
Involving about 1.1 billion yuan (US$132 million), the 12.6 kilometre-long pipe is expected to be built over the next two-and-a-half years.
It is the largest and most complicated part of the Beijing section, said Chen Xichuan, an official with the Office of the South-North Water Diversion Project Construction Committee under the State Council.
"It will not be easy to lay such a huge and long pipe. Its maximum diameter is 4 metres and it has to go through many other underground pipelines, bridges, flyover bridges and subway stations in Beijing.
"However, construction will not affect traffic thanks to preparations," he said.
The 307-kilometre long Beijing-Shijiazhuang section is a key part of the water diversion channel linking four reservoirs in Hebei with Beijing.
The canal is to help ease possible shortages in China's capital city before the 2008 Olympics.
Upon its completion, the 17.4 billion yuan (US$2 billion) Beijing-Shijiazhuang section is expected to carry 400 million cubic metres of water per year from the Gangnan, Huangbizhuang, Yukuai and Xidayang reservoirs in Hebei to Beijing, according to local water experts.
By 2010, urban and industrial water consumers in Beijing and Tianjin - two cities plagued by worsening water shortages - are expected to use water taken from the Yangtze River by the channels.
The south-to-north water diversion project consists of three south-to-north canals, each running more than 1,000 kilometres across the eastern, middle and western parts of the country.
The three lines are designed to divert water from the upper, middle and lower reaches of the water-rich Yangtze River into the country's drought-prone north.
Over the past two decades, hundreds of cities in North and Northwest China have had a growing problem with water supplies.
The middle line will take water from the Danjiangkou Reservoir in Central China's Hubei Province into large cities including Beijing, Tianjin, Shijiazhuang and Zhengzhou.
The eastern line is designed to transfer water from East China's Jiangsu Province along the Yangtze River into Tianjin.
Specific details about the western line are yet to be finalized.
To be built in three phases, section by section, the three canals will link up the country's four major rivers: the Yangtze River, Yellow River, Huaihe River and Haihe River. "That will optimize the country's existing water resources from within its major rivers and rearrange China's unevenly distributed water supply," said Zhang Jiyao, a top official with Chen's office.