Malaysia will pay US company Ocean Infinity up to $70 million if it can find the wreckage or black boxes of Malaysia Airlines flight 370 within three months.
Transport Minister Liow Tiong Lai says there is an 85 per cent chance of finding the debris in a new 25,000 square kilometres area identified by experts.
The search is expected to be completed within 90 days, he told a news conference.
"As we speak, the vessel, Seabed Constructor, is on her way to the search area, taking advantage of favourable weather conditions in the South Indian ocean," Mr Liow said in a statement.
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The vessel will have 65 crew, including two government representatives drawn from the Malaysian navy.
The search operation will begin on 17 January, Ocean Infinity Chief Executive Oliver Plunkett, who attended Wednesday's signing event, said.
Ocean Infinity will be paid $25.4 million if the plane is found within 5,000 square kilometres, $38.2 million if it is found within 10,000 sq km and $63.6 million if it is found within an area of 25,000 sq km.
Beyond that area, Ocean Infinity will receive $89 million, Mr Liow said.
Ocean Infinity's priority is to locate the wreckage or the black box recorders - flight and cockpit recorders - or both, and present credible evidence to confirm their location, he added.
Australia, China and Malaysia ended a fruitless $200 million search of an area of 120,000 sq km in the Indian Ocean in January 2017.
MH370 disappeared on 8 March, 2014, while flying from Kuala Lumpur to Beijing with 239 people on board, including six Australians.
