The line will start in border city Boten and travel past Luang Namtha, Luwang Prabang and Vang Vieng before arriving in capital Vientiane, with average speed set at 160 kph.
Earlier reports said construction of the Chinese section between Yuxi and Mohan began in January. The Kunming-Yuxi railway, whose reconstruction has already been under way, will test run by late 2016, according to the newspaper.
China and Laos signed an agreement on Nov 13, planning to use Chinese technology and equipment to build a 418-km line that will connect Kunming, capital of southwestern China's Yunnan province, with Vientiane.
The cross-border railway's average speed is set at 160 kph and 60 percent of the line will be bridges and tunnels. China will be responsible for 70 percent of the 40-billion-yuan ($6.27 billion) investment, while Laos will be responsible for the remainder.
The two nations began to discuss the line in 2010, but the project had not made any substantial development since then due to investment issues.
Railway authorities from both sides did not speed up their work until April 2014 when Lao Prime Minister Thongsing Thammavong visited China and met with President Xi Jinping and Premier Li Keqiang.