The department may enter into cooperative agreements with any branch, agency, department, board, instrumentality or institution of the state or United States government; with the respective municipalities, school districts and counties in this state; or with any adjoining state for the construction or improvement of public highways and streets within the control of a branch, agency, department, board, instrumentality or institution of the state or United States government or within a municipality, county, school district or adjoining state for the division between the department and the branch, agency, department, board, instrumentality or institution of the state or United States government, county, school district, municipality or adjoining state of the expense of the project development, construction, reconstruction, improvement, maintenance or repair of public highways, streets and public school parking lots, or for the acquisition of rights- of-way therefor or for materials for the construction or improvement thereof. The department shall bear all costs of the acquisition of rights-of-way for federal-aid interstate roads, both rural and urban.