US entertainment giant Disney and the Hong Kong government have reached a long-awaited agreement to expand the southern Chinese city's beleaguered Disneyland amusement park.

The deal -- which will see Disney invest 6.2 billion Hong Kong dollars (795 million US) in the joint venture -- will fund 30 new attractions at the park over the next five years, the government said in a statement.

As a result, Hong Kong Disneyland -- one of the smallest of the firm's global franchises -- will be enlarged by 23 percent with three new theme areas, the statement said.

"Hong Kong Disneyland is a major tourism infrastructure of Hong Kong. Its expansion will bring significant benefits to our tourism industry and to the overall economy," Hong Kong chief executive Donald Tsang told reporters.

Leslie Goodman, Disney's executive vice president for public affairs, welcomed the deal, which followed more than two years of negotiations.

"The expansion deal will contribute to Hong Kong?s appeal as an international, family-friendly tourist destination and the resort?s long-term success," he said in a statement from Disney's headquarters in California.

"Disney is making a substantial investment in this important project and we are eager to begin work as soon as the necessary approvals are received."

Under the deal, Disney will invest 3.5 billion Hong Kong dollars to fund the expansion. It will also convert 2.7 billion dollars of loans from the parent company to the joint venture into equity, increasing its shareholding.

Disney has been desperate to boost the number and quality of the attractions at the three-billion-US-dollar venue since it opened in 2005.

But the Hong Kong government has been reluctant to plough in any more cash after criticism that the initial deal was bad value for taxpayers and worries about visitor numbers, which have remained below expectations.

Disney even pulled out of negotiations earlier this year and suspended all creative work on the expansion.

Rita Lau, Hong Kong's secretary for commerce, conceded Tuesday the negotiations had been "extremely challenging".

The government said it was not investing any cash as part of the deal. However, it will also convert some its loans to the park into equity, Tsang said.

Under the deal, the government will retain control of the park with a stake of 52 percent, although that is reduced from 57 percent as a result of the injection of new funds.

It is hoped the expansion will create about 3,700 jobs.

The park was hit by a string of controversies over its first three years.

A long-running feud with staff unions over working conditions, several food poisoning scares and a ticket mix-up that provoked a near-riot with customers clambering over spiked fences, forced the park to reshuffle its management team within just a few months of opening.

Last year, the firm appointed another new managing director, Andrew Kam, who previously worked for Coca-Cola in China.

The move was seen as a much-needed shift of focus towards the mainland Chinese market and there has been an easing of visa restrictions for mainland visitors to the park.

The expansion plans have sometimes been overshadowed by Disney's determination to tap into the mainland Chinese market, although no deal has yet been signed for a much-touted Disneyland in Shanghai.