The United Nations and the government of Bangladesh have signed a memorandum of understanding to work together in aiding the protection and management of Rohingya refugees on an island in the Bay of Bengal.
Thousands of Rohingya have been relocated from crammed camps near the border with Myanmar, the UN said in a statement.
More than 19,000 out of the 1.1 million Rohingya refugees in Southern Bangladesh have already been moved to the Bhasan Char island by the government, and the UN said one of the key reasons to sign the memorandum was to start serving that population.
The government had earlier said that it has a plan to relocate 100,000 refugees to the island in phases from the camps in Cox's Bazar district.
The UN and other humanitarian groups had previously criticised the relocation, saying the 30-year-old island in the country's Noakhali district was not fit for habitation.
But the government of Prime Minister Sheikh Hasina has been insisting that the island was developed by spending more than $A153 million, and it was no longer a vulnerable area.
The island has now sea walls, hospitals, schools and mosques, the government said.
After Saturday's agreement, authorities said another 81,000 refugees would be relocated over next three months.
In a statement, the United Nations High Commissioner for Refugees said the new agreement was a further expression of Bangladesh's "generosity and support toward the Rohingya population until they can return safely and sustainably to Myanmar".
The statement said the UN held discussions with the Rohingya refugees in Cox's Bazar, as well as those already on the island, prior to signing the agreement.
"These cover key areas of protection, education, skills-training, livelihoods and health, which will help support the refugees to lead decent lives on the island and better prepare them for sustainable return to Myanmar in the future," according to the statement.
Johannes Van Der Klaauw, representative at the UNHCR, said the organisation has seen the island and believes "significant infrastructure" has been put in place by the Bangladesh government to offset environmental hazards.
Amir Hamza, 63, is one of many refugees who refuse to relocate to the island.
"I will go to the country where I was born, my father and grandfather were born. I have love for that country, and I agree to go to that country," he said.
"I don't agree to go to another country, island, or any place, even if I am offered milk and rice on a golden plate."
More than 700,000 Rohingya have fled to refugee camps in Bangladesh since August 2017, when the military in Buddhist-majority Myanmar began a harsh crackdown on the Muslim ethnic group following an attack by insurgents.
The Rohingya are not recognised as citizens in Myanmar, rendering them stateless, and face other forms of state-sanctioned discrimination.