A proposed high-speed rail line connecting Sydney to Newcastle will receive $78 million to prepare the project's business case.
Transport Minister Catherine King said the business case was expected to be handed to the government by the end of the year.
"High-speed rail is a transformative project that will change travel between cities and provide a catalyst for economic development in regional areas," she said on Tuesday.
"This is more than just a transport project. It will create jobs, improve productivity and support Australia's progress on environmental outcomes."
The long-term infrastructure project would ultimately allow passengers to travel between major cities and significant regional cities at more than 250km/h.
Ms King said the initial rail line was a "crucial waypoint" towards building a fast network on Australia's east coast.
The High Speed Rail Authority will prepare the business case which will determine proposed alignment, station locations and the type of train to be used.
In the first budget delivered by the government, it set aside $500 million to the early stages of developing high-speed rail.
