Senegal and the African Union have signed an agreement in Dakar to create a special tribunal to try former Chadian dictator Hissene Habre, who is accused of war crimes.

"Through the agreement, we are setting the procedure by which the trial should take place... there are no more obstacles,"  Aminata Toure, Senegal's Justice Minister, said on Wednesday after signing the agreement with AU representative Robert Dossou in the capital, Dakar.

"This is a big step... towards a fair trial. We lost a lot of time but the key thing is being done. We are moving resolutely towards the holding of the trial," she said.

Habre, whom the International Court of Justice ordered Senegal to try or extradite, has been living in Senegal since fleeing his country in 1990 after being ousted by President Idriss Deby Itno.

A 1992 truth commission report in Chad said that during his time in power, Habre presided over up to 40,000 political murders and widespread torture.

"The African Union is pleased that the principle of (fighting against) impunity is taking shape," said Dossou.

Strong evidence of torture

After four days of talks in Dakar, a draft agreement was drawn up between the AU and the Senegalese government on the creation of extraordinary African chambers within the Senegalese court structure.

A Belgian investigating team that travelled to Chad in 2002 visited detention centres and mass graves and found thousands of documents from Habre's political police, providing strong evidence of torture and rights violations.

The chambers will have four sections to handle instruction, investigations, trials and appeals, and will consist of Senegalese and other African judges.

While mandated by the AU to put Habre on trial in 2006, Senegal dragged its feet for years under President Abdoulaye Wade, citing problems in jurisdiction and then funding.

In 2010 about 8.6 million euros ($10m) was pledged by the European Union, Belgium, Germany, France, Luxembourg, the African Union and Chad for the holding of the trial.

However, just weeks later Wade said he wanted to "get rid of" the case, and the money was never paid.