King Mohammad VI of Morocco signed eight agreements with President Salva Kiir on Wednesday, and promised to pay for a $5m feasibility study for the new city of Ramciel.
The plan may be considered controversial however, as it could inevitably end up benefiting politicians who have been accused of committing war crimes and other atrocities during the country's extensive civil war.
"The money for this study is most likely to end up in the pockets of those who are furthering the violence," said Lucas van de Vondervoort, a programme officer at the European Institute of Peace.
"There's no real oversight in South Sudan and lots of corruption - it's not like it's in Morocco's interests to ask what happened with the money in five years time."
The Moroccan press reports that the decision is related to Morocco's interest in rejoining the African Union (AU) to prevent Western Sahara's access.
Algeria and South Africa have both lobbied at the African Union for an independent Western Sahara, which Morocco considers to be within its sovereign borders.
In order to gain allies against such a move, Rabat has started a number of infrastructure development projects across the African continent.
King Mohammad visited Juba the day after he addressed the African Union assembly in Addis Ababa and on the same day that Kenyan troops agreed to rejoin the UN peacekeeping force in the country.
|A recent report found that South Sudanese politicians, including President Kiir, had directly benefited financially from the civil war and that this had helped further the conflict.|
A recent report by The Sentry found that South Sudanese politicians, including President Kiir, had directly benefited financially from the civil war and that this had helped further the conflict.
The UN warned that a genocide may already be taking place in South Sudan in December, with government forces using widespread deadly force against civilians from a different tribe.
"Many of the warning signals of impending genocide are already there," said Yasmin Sooka, chairperson of a UN commission into South Sudanese war crimes.
The new city Ramciel, meaning 'central meeting place' in the Dinka language, is expected to be constructed 125 miles north of Juba.
Surveying for the new capital city began in September 2011 after President Kiir approved the $10 billion project the month previous.
Juba has been pressing to move the capital city move since the country was established in 2011, citing difficulties in approving necessary development works.These difficulties have arisen because the local land in Juba is owned almost entirely by the Bari tribe, whose leaders have sought high prices for the sale of land. The government has therefore sought to move the capital to a location with cheaper land prices, enabling further growth and cheaper development.
The agreement between the two countries also mentions improved co-operation in "Agriculture, Energy, Mining and Hydrocarbons, Industry, Investment, Tax Avoidance, Vocational Training and Economic Partnership".