The cooperation includes the provision of financial support to facilitate the deepening and strengthening of berths 1-7, the dredging of the entrance channel and turning basin in the port.
The initiative will also see the construction of a new berth and roll on – roll off terminal, and improvements in the spatial efficiency and operational effectiveness of the Port of Dar es Salaam.
"The provisional cost of the project is 565 million US dollars, and will be covered by a mixture of loan, credit, and grant from the Development Partners," said the World Bank in a statement.
"The overall objective of the co-operation is to support the TPA to realise the objectives of the government of Tanzania for the maritime sub-sector, as expressed in the Big Results Now (BRN) Initiative."
The Big Results Now is part of Tanzania's Vision 2025 seeking to increase the capacity of the port to 28 million tons by 2020 from current 14.6 million tons handled in 2013/14.
Phillipe Dongier, World Bank Country Director for Tanzania said the Memorandum of Understanding marked another significant milestone in the history of relations of the World Bank and Tanzania.
"The World Bank Group has been a consistent supporter to the transport sector in the country in the past and we are delighted that now we are closely working with the UK Department for International Development."
Ros Cooper, acting head of office for Department for International Development (DFID) added that the Port of Dar es Salaam was Tanzania's most important infrastructure asset.
"Future growth of the economy depends on the Port's ability to improve, to become more efficient and to be able to handle more trade," said Cooper.