The Papua New Guinea Government is to transfer some revenue raising powers to the Autonomous Bougainville Government.
This announcement was made by Prime Minister James Marape during his trip to Bougainville last week.
He said the National Government would transfer full revenue raising powers to the regional government and help it monitor the collections in fisheries, forestry, agriculture and other sectors.
The Bougainville Government said the transfer of revenue raising powers would allow it to prioritise its development programmes.
The transfer of powers follows the PNG government's approval of a $US287 million facility to generate economic development in Bougainville over 10 years.
The facility would provide US$28.7 million each year for what the prime minister described as "key economic enablers of the region".
The Bougainville Government is expected to decide where the money is directed.
Bougainvilleans told to be wary of PNG commitment
A former political leader in Bougainville is warning the people not be fooled by the funding promise.
Martin Miriori, who headed the Bougainville Interim Government during the latter stages of the civil war, asked how PNG could make such a payment when it was struggling with mountains of debt.
He said the new PNG prime minister was making promises he could not keep.
Mr Miriori said Bougainvilleans must not allow the PNG promise to divert them from the independence referendum coming up in November.