The announcement came during the premier's visit to Muzaffarabad to mark Kashmir Day.
"Government's priority is to give the people of Kashmir their due rights," PM Nawaz said, while addressing a joint session of the AJK assembly.
Kashmir shuts down to mark 'black day'
Referring to the long-drawn Kashmir dispute between India and Pakistan, the premier said, "Differences between countries is not unusual, but not being able to resolve issues for decades is a matter of concern."
"People of Indian-occupied Kashmir in 2016, are still fighting for freedom, the way they did in 1947."
"Time has once again come for the leadership of Pakistan and India to resolve matters," the premier added.
"Thus Pakistan has taken initiative to extend a hand of friendship towards all South Asian countries and the China Pakistan Economic Corridor (CPEC) is proof of that."
The interior ministry declared February 5 as a public holiday, across the country. One minute silence was also observed by the nation to express solidarity and honour all those Kashmiris killed while fighting for freedom.
Pakistan incomplete without Kashmir: political leaders
The premier also announced to help AJK rebuild the assembly building, the cost of which is approximately Rs2 billion.
"Speaker AJK assembly has requested the government to help rebuild the assembly building. I am happy to announce that the government is willing to provide half of the amount, or full if need be."
"The government's aim is to bring prosperity in the region," the premier said while adding that AJK should be treated like all other South Asian regions and development in this area should be given equal importance.
Right of self determination in this region should be accepted," he said.
"It is an honour to say that AJK, along with Khyber-Pakhtunkhwa (K-P) and Gilgit-Baltistan (G-B) will benefit from CPEC projects."
PM Nawaz expressed his desire to build a railway line connecting Islamabad and Muzaffarabad and to construct a highway from Muzaffarabad to Mirpur.
Discussing the current security situation in Pakistan, PM Nawaz told those in attendance that the government's focus is to maintain law and order across the nation.
Speaking about the ongoing strike by employees of Pakistan International Airlines, the premier said, "what the employees are doing is illegal and the government will not surrender before them or give into their demands."
Meanwhile, President Mamnoon Hussain and the prime minister vowed to continue Pakistan's unflinching moral, diplomatic and political support to the struggle of the people of Indian-held Jammu and Kashmir, Radio Pakistan reported.
Curfew imposed in Indian-occupied Kashmir to prevent Independence Day celebrations
In separate messages on the occasion, the leaders said, "All Indian brutalities and atrocities have failed to deter the people of Kashmir from their fight for freedom from Indian oppression."
Pakistan is committed to a just and peaceful resolution of the Kashmir dispute in accordance with the UN resolutions.
Both the leaders urged the international community to fulfill the promise made to the people of Indian-occupied Kashmir 68 years ago.
"Peace in the region would remain elusive until the resolution of the Kashmir dispute," President Mamnoon and PM Nawaz said.
COMMENTS (9)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ