The 730km subsea electricity cable will run from Blyth in Northumberland to Kvilldal in Rogaland on the Norwegian side.
A converter station on each side will link the interconnector to the on-shore grid.
The project, which is expected to be completed by 2021, is estimated to cost €2bn to be shared jointly by Statnett and National Grid.
National Grid European business development director Alan Foster said: "Access to low-carbon energy from Norway hydro power stations will help us meet the challenge of greener, affordable energy.
"It also adds to the diversity of energy sources for UK and potentially can reduce peak prices with benefits for consumers and businesses."
UK Energy Secretary Ed Davey said: "Britain will benefit from Norwegian green hydropower, at the flick of a switch, providing green backup power when the wind’s not blowing, and this will actually save people money."
The UK is also working on the 1GW Nemo link interconnector with Belgium. The link will run 140km between Richborough on the Kent coast and Herdersbrug, near Zeebrugge.
Image: The 1.4GW interconnector between the UK and Norway is estimated to cost €2bn. Photo: Courtesy of a454/FreeDigitalPhotos.net.
