The venture, known as PDV-Cupet, will be 49% owned by Venezuela with Cupet, the Cuban state oil company, taking a 51% stake, PDVSA said in a press release on Tuesday.
Venezuela and Cuba will invest between $800 million and $1 billion in the joint venture.
Agreements signed on Monday guaranteed Venezuelan crude of 70,000 barrel per day (bpd) to the currently unused refinery on the shore of Cienfuegos Bay in south-central Cuba.
The agreement would bring total Venezuelan oil shipments to Cuba to 160,000 bpd. PDVSA's statement did not say when the refinery would begin operations.
The revamped refinery would help Cuba to reduce its imports of fuel. It would also help supply energy to neighbouring Caribbean nations as part of Chavez's energy integration efforts.
The refinery was built with Soviet aid, but work on the all-but-completed plant stopped when the Soviet Union collapsed in 1991 and plunged Cuba into severe economic crisis.
PDVSA has studied the possibility of investing in the plant since Chavez took office in 1999. Fidel Castro, the Cuban leader, and Rafael Ramirez, the Venezuelan Oil Minister attended the signing of the agreement.
Venezula's oil officials said last year they planned to invest $60 million to $100 million to activate the refinery and convert the plant to process heavy sour Venezuelan crude rather than the lighter oil it was designed to take.