The firms, which have cooperated on power-generation projects since 1982, said that they would further expand their joint work in so-called combined-cycle power generation.
The technology combines gas and steam turbines to produce power with higher fuel-efficiency and reduced carbon emissions, compared with conventional thermal power plants.
“Today’s announcement builds on (our) long, successful history of collaboration by targeting projects around the world that the companies can jointly develop and by exploring joint development of future combined-cycle technology,” a statement said.
No financial details were released.
The pair said they won a contract last year to supply technology to a thermal power plant in central Japan, as the disaster-struck country looks for alternative energy sources after switching off its atomic reactors in the wake of the Fukushima nuclear crisis.
The announcement Thursday came as competition intensifies in the growing global energy market, largely driven by demand in fast-growing economies in China and other emerging markets.
In November Japanese industrial firms Hitachi and Mitsubishi Heavy Industries said they would merge their thermal power businesses by 2014 to take on industry giants including GE and Germany’s Siemens.
The pair said they would set up a joint venture company with about 1.1 trillion yen ($12.4 billion) in annual sales.
Toshiba was up 2.46 percent at 374 yen in Tokyo afternoon trade Thursday.