A formal ceremony marking the start of full construction at Xayaburi would be held on Wednesday, the government said.
Countries downstream from the $3.5bn (£2.2bn) dam fear it will affect fish stocks and the livelihoods of millions.
The announcement came as leaders from Asia and Europe began a two-day meeting in the Laos capital, Vientiane.
Landlocked Laos is one of South-east Asia’s poorest countries and its strategy for development is based on generating electricity from its rivers and selling the power to its neighbours, says the BBC’s Jonah Fisher in Bangkok.
Xayaburi is being built by a Thai company with Thai money – and almost all of the electricity has been pre-sold to Thailand, our correspondent says.
Countries such as Cambodia and Vietnam point to a report that said more research needed to be done on the dam’s environmental impact.