This was announced in the state-owned Herald newspaper on Monday.
The deal would be one of the largest infrastructure investments in a country shunned by Western governments and funding institutions such as the World Bank, because of its failure to repay billions of dollars of debt.
Harare, whose affairs are run by the opposition Movement for Democratic Change, would set up a joint venture firm, Harare Roads Development Company, with Neo Capital of South Africa to run the project for a period of 30 years, according to the Herald.
An official at Johannesburg-based Neo Capital said only the company's Chief Executive Vivien Natasen would give a response to the report, but he could not be reached by Reuters for a comment.
"Neo would contribute 400 million US dollars for the project. The Harare Roads Development Company would get its revenue from vehicle licence and billboard activities," the Herald quoted minutes of a meeting of Harare's councillors as saying.
Harare Mayor Bernard Manyenyeni and his top officials were out of the country and unavailable for comment.
President Robert Mugabe's cash-strapped government says it requires 27 billion US dollars - more than twice the size of its economy - to fund a five-year plan to improve basic services and rebuild the impoverished country's infrastructure.