Under the agreement, the two companies will exchange past exploration information on areas prospective for diamonds in Zimbabwe and form a jointly-owned special purpose vehicle to develop and exploit diamond resources.
Both companies now have a Zimbabwe diamond database, with Vast acquiring its database in September 2008 and carrying out exploration using the data until 2010, and Botswana independently acquiring one itself.
Botswana Diamonds chairman John Teeling said Zimbabwe had excellent diamond potential and was "opening for business and both Botswana Diamonds and Vast are keen to make the most of this opportunity".
Vast CEO Andrew Prelea said, with the new Zimbabwe government's desire to open up for business, the company believed it was the right time to use its diamond knowledge to bring value for stakeholders by developing diamond resources.
In a bid to attract investors to its mining sector, Zimbabwe said in February it would relax its ownership laws requiring companies to sell or transfer 51% equity to black citizens, particularly in the platinum and diamond sectors.