According to Xinhua news agency, China "on Friday blocked a tributary of the Yarlung Zangbo river as part of its most expensive hydro project".
"The Lalho project on the Xiabuqu River in Xigaze, involves an investment of 4.95 billion yuan ($740 million)," Xinhua quoted Zhang Yunbao, head of the project's administration bureau, as saying.
Brahmaputra flows into Arunachal Pradesh from the Xigaze region which is also known as Shigatse.
The blocking of the tributary could have an impact on lower riparian countries like India and Bangladesh.
The move also comes as India has decided to revisit the Indus Waters Treaty with Pakistan, by apportioning more water to itself. China and Pakistan are all-weather friends, and Beijing has openly backed Islamabad's position on several issues that contradict India.
The hydel project, launched in June, 2014 "was scheduled to be completed in 2019. Its reservoir was designed to store up to 295 million cubic metres of water and help irrigate 30,000 hectares of farmland", it said.
The project serves multiple purposes, including irrigation, flood control and power generation, said Zhang.
The project will have two power stations with a combined generation capacity of 42 megawatts.
They are designed to generate 85 million kilowatt-hours of electricity each year, it said.
