Work to establish links with Zolotarevo, which is located close to the Hungarian border in the Transcarpathia region of the Ukraine, has been ongoing for the past seven years.
The idea began in 1998 when a group from the Church of Scotland in Newport decided to provide a holiday in the town for disadvantaged children as part of a millennium project.
The idea grew to include the involvement of all the churches in Newport, and a core committee and various working groups were established to work on the plan.
Eventually, the Newport Ecumenical Group managed to overcome various difficulties to bring 25 youngsters and five adults from the Ukraine for a two-week break in 2001.
The following year, a group from Newport made the return journey to Zolotarevo for a visit which helped to further cement the relationship.
The two communities have kept in regular close contact since links were initially established, and money has been raised locally to help provide a school in Zolotarevo with a computer, music equipment, and English language books.
The formal agreement was welcomed by Marion Heredia, chairperson of the Newport Ecumenical Group committee behind the twinning project.
"We are delighted that we have Fife Council's backing for the twinning project," she said.
"Things went to sleep for a bit, but we are hoping to get things going again.
"We have continued to raise funds for the project and are hoping to develop our cultural and educational links with Zolotarevo."

Read more in this week's Fife Herald.