Beijing - Russia on Tuesday formally returned to China half of an island that was seized in 1929 by troops of the former Soviet Union during a border skirmish.

Chinese and Russian diplomats and defence officials held a ceremony to unveil new boundary markerson Heixiazi (Bolshoi Ussuriysky) Island in a border river, the government said.

The two nations signed a final agreement in July on disputed areas along their 4,300-kilometre border, with Russia reportedly conceding 174 square kilometres, including two small islands in the river.

Foreign ministry spokesman Qin Gang on Tuesday said the border settlement could set an example for other countries on how to resolve "sensitive" and "complicated" issues.

China said Russia had also conceded Yinlong (Tarabarov) island which, like Heixiazi island, is at the confluence of the Heilong and the Wusuli (Ussuri) rivers on China's border with Russia's far east.

"The experience of China and Russia in resolving border disputes left by historical reasons proves that peaceful dialogue and fair and reasonable consultation on an equal basis are an effective way," Qin told reporters.

He said the settlement, which came after years of negotiations, "reflects the high level of the China-Russia strategic and coordinative partnership." (dpa)