A $50 million contribution from the federal government towards the Woden light rail extension will be spent on design work and approvals for the project, while questions over the route and total cost are hammered out.
The funding, to be included in next week's federal budget, has been allocated in response to the ACT government's most recent infrastructure wishlist.
But the Commonwealth would not confirm whether it will contribute half of the cost of building the Woden light rail extension, a move the ACT government is hoping for.
ACT Transport Minister Chris Steel said Tuesday's announcement was the first time the federal government had put money towards light rail stage 2B, which will link Commonwealth Park with the Woden town centre.
"This is what happens when we have two Labor governments working together to deliver a mass transit system, connecting north and south of Canberra," he said.
"The actual money, combined with the contribution that the ACT government has already funded, will go into the design and approvals for this project, which is the critical first stage of getting this project off the ground."
Mr Steel also said that sites such as the Matilda Street car park in Woden would be sold off and the proceeds used to help fund the light rail project.
Federal Infrastructure and Transport Minister Catherine King and Finance Minister Katy Gallagher would not confirm whether additional funding for other stages of the project would be forthcoming.
Ms King said the government was focused on funding a "pipeline of projects" for the ACT.
"We look forward to seeing the business case and then obviously, requests for investment for further construction of light rail, which I'm sure will come in subsequent budgets," she said at a press conference in Woden on Tuesday morning
Ms King did acknowledge that federal funding would be necessary to complete the project.
The ACT government has not released a budget estimate for stage 2B, which is expected to be built between 2028 and 2033. Stage 2A, which is contracted for $577 million, is half funded by the Commonwealth.
But it's unclear if the funding will still be on offer if the Liberals win this year's territory election.
Ms King said the federal government would "work with the ACT government".
"The ACT Labor government has been an absolute champion of public transport, of light rail," she said.
"It's pretty clear that only Labour cares about public transport. The Liberals [are] just frankly, the most negative I've ever seen."
The federal funding is in response to the ACT's "wishlist" of infrastructure projects, Ms King said.
Mr Steel also fired a shot at the Liberal party, who've said they won't fund the light rail extension but rebuild the bus network if they win the October election.
"The Liberals would not build light rail. They've got a transport plan which lacks vision and which leaves the south side behind," he said.
The stage 2B extension is currently in the environmental approvals stage, Mr Steel said, with community consultations to begin in the next few weeks.
Accessibility and connections will be priority discussions for those living in Woden and the Parliamentary precinct.
